Why Nigerian fintech startup Pivo shut down 1 year after announcing a $2 million round

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December 5, 2023
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3 min read
Pivo Team
Pivo Team

The news:

  • Nigerian fintech startup Pivo has shut down its operations. 
  • This news comes one year after the startup raised a $2 million seed.
  • The startup was founded in 2021 to provide banking services for SMEs in Africa. 

Two-year-old Nigerian fintech startup Pivo has shut down one year after raising $2 million in a seed round that had Y Combinator and VestedWorld participating. 

Founded by Nkiru Amadi-Emina (CEO) and Ijeoma Akwiwu (COO), Pivo was billed as a neobank for supply chain businesses in Africa.

According to TechCabal, the startup hasn’t provided any further details about the shutdown.

The $2 million it raised back in November 2022 after a $550,000 pre-seed round completed the same year, was to expand its product offerings.

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At the time, it disclosed seeing business accounts grow by 400% and planned to develop solutions for supply chain anchors. Techpoint Africa reached out to the founders, to learn more about the shut down, but there was no response from them at the time of this publication.

Possible reasons behind Pivo’s shutdown

While Amadi-Emina declined to comment on the startup’s shutdown, a few reasons could be responsible for this development. Given Nigeria’s heavy dependence on imported products and its broken transport infrastructure, providing financing for supply chain businesses was always a smart move. 

However, the last year has been particularly tough for Nigerian businesses. 

In October 2022, the Central Bank of Nigeria announced that it would be redesigning the country’s ₦‎100, ₦‎200, ₦‎500, and ₦‎1,000 notes. Such decisions are often accompanied by a long implementation time, but Nigerians had roughly three months to comply. 

Coupled with a botched rollout of the newly designed notes, many businesses and individuals struggled to access cash. 

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PoS agents were obvious casualties but many other businesses were significantly affected by the ensuing cash crunch. While it encouraged the adoption of digital payments, it also forced many businesses to close shop. 

Ninety-one per cent of businesses had to renegotiate payment structures or dip into their savings to meet obligations as demand for goods dropped, according to a report by research outfit, SBM Intelligence. 

Although the currency redesign was halted in 2023, the country has only gotten worse since then. Floating of the naira by the newly elected president has negatively impacted the value of the naira against the dollar, driving up the cost of production for many businesses. 

Another possible reason for its demise could be its business model. Having built and worked with businesses in the supply chain sector, Amadi-Emina and Akwiwu discovered that these businesses had irregular payment cycles. This often caused them to miss out on business opportunities and stunted their growth.

In response, they launched Pivo to provide loans to tide these businesses over. Its lending service was intended to be a customer acquisition tool, with the ultimate aim of becoming the neobank for Africa's supply chain businesses.

However, this approach may have been its undoing. For one, it would require a capital source for the loans. Commercial banks give out loans but are helped by customer deposits.

Although Pivo did not disclose how it got the money it lent to the businesses, we can make a few deductions. Pivo Capital, its lending service, was the main product, which means users did not necessarily have deposits with them before they accessed loans.

As such, they would have to get capital from other financial institutions or high net worth individuals. At a time when Nigeria's interest rates have increased, both options would increase their costs, which would naturally be passed on to the user in the form of interest. If the interest was higher than they would get at a bank, these businesses may decide against taking the loans.

On the other hand, high demand could also stretch them and leave them sourcing for funds. When Techpoint Africa first spoke to them in 2022, the then one-year-old startup shared that it had received loan requests of more than $2 million and disbursed $1 million at the time.

Finally, it may have struggled to convince users to see it as their main banking provider. While digital banks in Nigeria have quickly gained customers, many people remain wary of using them as a primary banking service provider.

Either way, Pivo's shutdown could simply be a case of good product but bad timing.


Accidental writer, covering Africa's startup landscape and its heroes. Find me on Twitter @chigo_nwokoma.
Accidental writer, covering Africa's startup landscape and its heroes. Find me on Twitter @chigo_nwokoma.
Accidental writer, covering Africa's startup landscape and its heroes. Find me on Twitter @chigo_nwokoma.

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