Home Business Nigerian fintech, Duplo, raises $4.3m seed funding to digitise B2B payments

Nigerian fintech, Duplo, raises $4.3m seed funding to digitise B2B payments

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The B2B payments sector in sub-Saharan Africa offers a lot of promise. According to a 2016 World Bank report, micro, small, and medium retailers paid out $1.5 trillion to their suppliers in 2015. Currently, this sector is dominated by cash payments and offline bank transfers, which has caused late payments and the slowdown of commerce on the continent. 

A Quickbooks survey from last year, covering 3,500 companies across 6 nations, reported that 23% of small businesses experienced delayed payments. A recent report from Duplo, which included the surveyed opinions of more than 1,000 business owners from Kenya, Nigeria, South Africa, and Egypt, highlighted that 44% of businesses still have to wait more than 24 hours to receive payments from business customers and partners. The report also shows that 34% take up to 7 days to receive payments, 17% take up to 30 days, and 3% take more than 30 days to receive business payments. 

This slowdown in business capital can be a harbinger of doom for fast-moving consumer goods (FCMG) businesses. Cash flow restrictions, combined with the prevalence of fraud and theft that inevitably come with moving large sums of money, can spell the end for these businesses. To remedy this, they have to resort to time-wasting and tedious administrative procedures, which ultimately divert scarce resources.

Providing a solution to these problems is Duplo, a Nigerian business-to-business payment platform that digitises payment flows. Founded in 2021 by Yele Oyekola and Tunde Akinnuwa, the company recently announced that it has raised $4.3 million in seed funding to launch new products and expand into new business verticals in Nigeria.  

The seed funding round included investments from Liquid2 Ventures, Soma Capital, Tribe Capital, Commerce Ventures, Basecamp Fund, and Y Combinator. Oui Capital also re-invested after participating in the previous round.

In a statement shared with TechCabal, Peter Oriaifo, Principal at Oui Capital, said concerning the raise: “The Duplo team has built an incredible suite of products that improves how businesses make and receive payments from each other, and the growth that the company has experienced since our initial pre-seed investment in 2021 has been nothing short of impressive. It is for this reason that we are excited to back Duplo once more.”

On a call with TechCabal, Yele Oyekola, cofounder and CEO of Duplo, said that since the company’s pre-seed of $1.3 million earlier this year, the company has grown its monthly payment volume by 4,000%, and it has also increased its customer base over the past three months by over 1,000%. He added that with this new raise, the company would improve on its products, develop new products such as cross-border payments, and increase the industries it currently operates in. Duplo mostly operates in the fast-moving consumer goods (FMCG) sector, but according to Oyekola, the company wants to pivot to new industries such as construction, telecommunications, and healthcare. 

Having been part of the Y Combinator Winter 22 batch, Oyekola said that the accelerator has been immensely beneficial in teaching them what to avoid in the early stages and how to achieve product-market fit. 

Despite the recent slowdown in funding globally and uncertainties with their current round of seed funding, Duplo has been able to raise a combined $5.6 million in pre-seed and seed funding. According to Oyekola, this is because investors are excited about the opportunity that exists in the B2B payments sector in Nigeria and Africa as a whole.

Before co-founding Duplo, Oyekola had previously worked at Carbon, building the initial versions of Carbon Zero, a buy-now-pay-later product. He also co-founded Julla, a buy-now-pay-later product for East Africa. Although Julla crashed after a year, Oyekola said the lessons he learned were essential in co-founding Duplo. 

According to Oyekola, he saw the need for Duplo because of the fraud and theft issues his grandmother endured for years as one of Nestle’s distributors in Osun State, Nigeria. Since January 2022, Duplo has aided FMCG distributors, mid-size finance teams, and enterprise organisations in digitising and streamlining the way money moves between them and their business partners. FMCG distributors can add merchants to the Duplo platform, making it simpler for them to accept payments online and gain real-time business performance information. The platform also enables them to automate payments to vendors, manufacturers, and suppliers, and with instant payments, they can transact in larger quantities.

Duplo’s end-to-end solution also automates the procedure of creating and processing invoices, accepting and approving bills, gathering and disbursing payments, and finishing account reconciliation for finance departments.

Tachcabal

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