Onepipe, a Nigerian fintech startup, has secured a $4.8 million credit line from TLG Capital, a pan-African investment firm, to support its inventory finance solution for small businesses. The funding will be restricted to the inventories of small shops in Onepipe's network and will be used to expand its operations and become a leading provider of financial services to Nigeria's informal sector.
The TLG Africa Growth Impact Fund, which invests in sub-Saharan Africa with a focus on SMEs, provided the funding for Onepipe. The informal sector, which the International Labour Organization says accounts for around 85% of African employment, is a key market for Onepipe's financial services.
Onepipe's inventory finance solution aims to bring financial flexibility to FMCG supply chains by empowering distributors to offer inventory finance to retailers. Onepipe pays for the goods, and the merchants can refund when they sell, ensuring that the supply of goods is not hindered by a lack of funds. The company believes that improving financial access to the informal sector is crucial for economic development, job creation, and GDP growth in Africa.
Despite securing the credit line, Onepipe is also letting go of around 20% of its employees to streamline projects and adjust to the macroeconomic headwinds. The management team and CEO will also receive pay cuts as the company strives to extend its runway in what has been a challenging quarter for several tech companies.
The TLG Africa Growth Impact Fund's investment thesis provides a nexus between social impact and commercial returns, and its support of Onepipe's inventory finance solution demonstrates its commitment to investing in solutions that can improve access to financial services for Africa's informal sector.
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