Financial conglomerate BAS Group moves to address Nigeria's $236 billion credit shortage through acquisition of Zuvy, a digital lending platform.
In a significant move for Nigeria's small and medium-sized enterprise (SME) financing market, BAS Group, a Nigerian investment company, has acquired a majority stake in Zuvy Technologies, a Lagos-based startup that provides short-term financing to SMEs. The acquisition, an all-cash transaction, marks a strategic step forward in the sector's digital transformation and growth.
Zuvy Technologies, founded by Angel Onuoha and Ahmad Shehu, struggled to grow its loan book and scale rapidly due to its direct lending model's dependence on continuous fundraising. In search of a model that could support long-term growth, Zuvy shifted from direct lending to a loan origination model. Under BAS Group, Zuvy plans to expand its loan book and reach more businesses.
The founders of Zuvy, who have now stepped back from day-to-day operations, view BAS Group as a strategic long-term partner. Co-founder Angel Onuoha and Ahmad Shehu have already embarked on a new venture, Avelis Health, a healthtech startup.
BAS Group found Zuvy's broad vendor list attractive as it seeks to diversify its SME lending portfolio. Under the new ownership, BAS Group plans to funnel repayments and future disbursements through Zuvy's tech-enabled system. This move allows BAS Group to add invoice-backed credit to its offerings, allowing vendors to access early payment on their invoices without traditional collateral.
The acquisition of Zuvy Technologies highlights the growing interest in providing short-term financing to SMEs through invoice discounting, a method that can help bridge the substantial credit gap of $236 billion that leaves many SMEs struggling to access working capital.
With the advent of e-invoicing in Nigeria, expected to start in July 2025, the market could see increased transparency and efficiency in transactions. This digital shift, coupled with the entry of new players and the expansion of existing ones, such as Liquify's planned entry into Nigeria, indicates a growing competitive landscape in digital invoice financing.
The implementation of e-invoicing and potential regulatory support could further facilitate the growth of the invoice-backed SME financing sector by reducing fraud and increasing trust in digital transactions. Technological advancements, such as the use of AI and digital platforms, can streamline processes and reduce costs, making these services more accessible to SMEs.
Despite the promising outlook, challenges such as infrastructure quality and regulatory compliance will need to be addressed to fully realise the sector's potential. The acquisition of Zuvy Technologies by BAS Group, however, is a testament to the significant market size and potential for growth in Nigeria's invoice-backed SME financing sector.
Notably, Zuvy was profitable at the time of acquisition, and the company has repaid the $4 million debt it raised in a previous round. The integration will be led by Kayode Adnan, COO of BAS Group. No layoffs are expected as a result of the acquisition, and Zuvy's tech and business development teams will continue under the BAS umbrella.
- BAS Group's investment in Zuvy Technologies, a healthtech startup founded by Angel Onuoha and Ahmad Shehu, signifies an expansion of the finance business into the invoice-backed credit sector, allowing vendors to access early payments on their invoices without traditional collateral.
- As Zuvy Technologies plans to expand its loan book and reach more businesses under the new ownership, the company foresees growth in the healthtech sector, allowing them to step back from day-to-day operations and focus on their new venture, Avelis Health.
- The integration of Zuvy Technologies into the BAS Group is part of a broader trend in the Nigerian market, with the advent of e-invoicing, regulatory support, and increased competition from players such as Liquify, indicating a shift towards digital invoice financing and a growing potential for SME financing in the technology sector.
