SMEs contribute a greater percentage in the business sector and a key players in the overall demand and supply chain.
It is hence imperative to allude that the success of any nation or state is dependent on the growth of its Small and medium enterprises (SMEs)
Having said that, one of the challenges most SMEs in supply chains across different sectors in Africa is the delay in receiving invoices from clients, leading to delays in executing these orders which often take several weeks and sometimes months. This very inefficient means of doing business leads to cash-flow problems, and fragmented payment collection and tracking processes.
To meet the challenges, the startup Pivo came into being.
Started in July 2021 by Nkiru Amadi-Emina and Ijeoma Akwiwu in July 2021, Pivo a Nigeria based freight carrier com provides financial services — credit, payments and expense management — to SME vendors within large manufacturing supply chains. The startup since its launch a year ago has raised over $2.55 million.
Amadi-Emina 2017 started an on-demand delivery platform targeted at e-commerce brands in North and Central Africa, which was later acquired by one of Africa’s renowned e-logistics companies Kobo360. During her time at Kobo360, She was the enterprise account manager, and then the head of port operations before she left. One of the glaring problems she witnessed was cash liquidity which existed at both ends of the logistics supply chain. Truckers need advances from logistics companies such as Lori Systems, and Kobo360 to move cargo; meanwhile, these companies also require manufacturers to pay on time for distributing cargo to truckers.
“In most cases, we found out that managing cash flow was the primary issue for these businesses — it was either nonexistent or just paper-based,” Amadi-Emina said in an interview with Techcrunch. “A lot of the payments made were made with cash and we thought to build a digital bank that provides financial services geared towards solving these various problems for SME vendors that operate within large manufacturing supply chains, starting first and foremost with the logistics providers, and then gradually moving to the supplier pockets and at the tail end of things.”
Pivo leverages manufacturing supply chain relationships and deploys financial services to the SMEs within them, mostly truckers in this instance. The credit play of its platform, Pivo Capital, serves as an early payment alternative for truckers and allows logistics companies to deal with any upfront costs — such as diesel and driver’s allowance — typically incurred during operations. Pivo Business, its payments reconciliation arm, helps these small businesses to facilitate payments via peer-to-peer transfers and track payments with debit cards with spend controls. Amadi-Emina explained that all these features will drive Pivo to capture a sizable portion of a $4 billion addressable market opportunity.
“As a plug-and-play and embedded solution, we’ve always been more complimentary than competitive,” the chief executive told TechCrunch when questioned about Pivo’s chances if e-logistics firms launch a competing product. “If you look at e-logistics firms, the goal for them is to move towards a platform approach and if at any point in time they want to unlock financial services, we tell them to come to PIVO for that instead of going to the traditional banks.”
Pivo’s Seed Funding
Just recently, Pivo announced the close of a $2 million seed round. Investors in this seed round include Precursor Ventures, Vested World, FoundersX, and Y Combinator. Pivo, in a statement, said it intends to use the financing to upgrade existing products, build new ones, hire talent and expand outside of Lagos, its first market and other African countries, particularly in East Africa.
Note: Amadi-Emina and Ijeoma Akwiwu are said to be the first all-female founded team the famed accelerator has backed in Nigeria — and the second in Africa after the defunct Ghanaian startup Tress.