Zuvy, a startup emerging from stealth mode, has secured $4.5 million in funding to provide invoice financing solutions for small and medium-sized enterprises (SMEs) across Africa.
The company, founded in 2021 and currently headquartered in Nigeria, aims to address the common challenges faced by SMEs when it comes to securing timely payments and managing their cash flows effectively.
Zuvy was born out of a fortuitous encounter on Twitter, where co-founders Angel Onuoha and Ahmad Shehu connected over their shared passion for digitizing financial services and supporting small businesses in Africa.
They recognized the prevalent issue of payment delays that plague SMEs in Nigeria, with some large corporations taking up to 90 days to settle invoices for services rendered. While this practice may benefit the cash flow of these corporations, it significantly impacts SMEs with limited financial resources.
The primary focus of Zuvy lies in serving businesses operating in the fast-moving consumer goods (FMCG), healthcare, and supply chain sectors, where payment delays are most pronounced. To access Zuvy’s innovative invoice financing solution, businesses simply submit their invoices, and in return, Zuvy provides them with much-needed cash.
To ensure the legitimacy of the loan applications and facilitate easier repayment, Zuvy establishes a connection with the business receiving the services. The receiving business confirms the relationship with the invoice-issuing business and agrees to direct the repayment to Zuvy. Repayment terms are flexible and tailored to the specific needs of each business, ranging from 30 to 90 days.
By leveraging its collaboration with the service recipients, Zuvy enhances the credibility of the loan applications, streamlines the repayment process, and reduces the risk of default.
The company also employs internal metrics to determine the eligibility of businesses for financing. Compared to traditional loans, Onuoha believes that invoice financing offers a more suitable and accessible option for small businesses seeking capital.
Before launching Zuvy, Angel Onuoha held a position as a product manager at Google and co-founded BLK Capital Management, a student-run hedge fund, during his time as an undergraduate at Harvard University. Meanwhile, Ahmad Shehu previously served as a product engineer at Mono, a startup specializing in open banking solutions.
Zuvy operates on a revenue model that involves charging a fee for cash advances. Additionally, users gain access to a digital wallet, made possible through strategic partnerships with select commercial banks.
The company’s inventory management tool, integrated into its platform, allows users to issue invoices and manage their finances efficiently. This feature enables Zuvy to determine the appropriate level of financing to offer to each business, customizing the offers based on their specific requirements and repayment capacity.
TLG Capital, a prominent investment firm, led Zuvy’s funding round, which consisted of a combination of debt — $4 million and equity — $580,000. Several other venture capital firms and angel investors also participated in the funding round. The debt portion of the investment will be instrumental in expanding Zuvy’s loan book, catering to the growing demand from vendors across Nigeria.
Zuvy’s innovative approach to invoice financing and its commitment to supporting SMEs in Africa positions it as a game-changer in the financial services landscape. With its secured funding, the company is poised to revolutionize the way SMEs manage their cash flows, empowering them to thrive and contribute to the region’s economic growth.
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