What happens when a promising fintech startup discovers its customers’ biggest hurdle isn’t access to capital, but access to consistent power? For Nigeria’s Payhippo, the answer was a bold pivot. Founded in 2019 as a digital lender to small and medium-sized enterprises (SMEs), the company has rebranded as Rivy and secured $4 million in pre-Series A funding to fuel its new mission: providing clean energy financing to businesses across Nigeria and beyond.
The funding, a balanced mix of $2 million in debt and $2 million in equity, signals strong investor confidence in Rivy’s strategic shift. The equity round was co-led by EchoVC, a Nigerian venture capital firm with a focus on climate solutions, and All On, Shell’s impact investment arm dedicated to addressing energy access in Nigeria. Local debt providers contributed the debt portion.
Rivy’s transformation underscores a growing trend within Africa’s dynamic fintech landscape. Faced with fundamental infrastructural challenges, some fintechs are moving beyond traditional lending models to tackle systemic issues. Rivy’s CEO, Dami Olawoye, who took the helm in 2023 after previously serving as CFO, explains the rationale behind the change. “When Rivy was an SME lender, the recurring theme we found with small businesses seeking loans was their lack of electricity,” he says. “We also observed that solar installers lacked the upfront capital to purchase equipment in bulk. This led us to expand into asset financing in June 2023, enabling businesses to acquire solar systems and spread the cost over time.”
Instead of directly supplying clean energy solutions, Rivy operates a marketplace model. It connects over 250 vetted solar vendors and installers with businesses seeking to transition to cleaner energy sources. Crucially, Rivy provides the necessary financing, allowing businesses to overcome the significant upfront costs associated with solar installations. This dual approach addresses both the supply and demand sides of the clean energy equation for businesses.
The leadership transition in 2023 also saw co-founder Zach Bijesse move to the board, while Chioma Okotcha, another co-founder, remains actively involved as Rivy’s COO. The company was initially founded by Okotcha, Uche Nnadi, and Bijesse, gaining early traction and acceptance into the prestigious Y Combinator accelerator program in 2021.
Despite the significant product expansion, Rivy maintains that its core strength lies in its underwriting engine, developed during its time as a lender. Olawoye claims the company’s non-performing loan (NPL) ratio remains impressively low, below 1%, indicating robust credit risk management. “We built our underwriting engine, and its effectiveness is evident in our low loan defaults,” he states, though he declined to provide specific details on the proprietary technology.
Since focusing on clean energy financing, Rivy has witnessed substantial demand. In 2024 alone, the company disbursed $2 million in loans and has seen its loan book grow at an average monthly rate of 15%, according to Olawoye. He argues that the long-term cost savings of solar energy make it an attractive proposition for businesses reliant on expensive and often unreliable traditional power sources. “When you do the math, businesses with high electricity demand will spend more in the long term,” he explains. “Financing a solar system through Rivy results in lower monthly expenses compared to fueling generators or paying revised electricity tariffs.”
Rivy’s loan terms are tailored to each business’s specific electricity needs, logistical considerations, and installation service charges. Interest rates typically start around 12% for a three-month term, increasing with longer durations. However, businesses are required to make an initial deposit of at least 30% of the total loan amount.
Beyond individual businesses, Rivy is also financing larger-scale micro-grid projects that serve clusters of businesses, communities, and even households. While its primary focus remains on commercial clients, the company has also extended its financing solutions to individual consumers.
Olawoye emphasizes the strategic decision to raise a combination of debt and equity. While debt is a natural fit for a lending model, securing it often requires a foundation of equity. “Equity is expensive,” he notes. “We can’t continuously raise equity solely for lending, as it would lead to shareholder dilution. Future funding rounds will likely continue this blend of debt and equity.”
Looking ahead, Rivy aims to solidify its position within Nigeria while actively exploring expansion opportunities in other markets facing similar energy challenges. From its initial vision of providing financial oxygen to SMEs, Rivy is now setting its sights on a larger ambition: to be a key player in illuminating the future of businesses across Africa with sustainable and affordable clean energy. In a nation where consistent power remains a significant impediment to growth, Rivy’s pivot could be a game-changer, holding the torch towards a brighter, more energized future for Nigerian businesses.