Investment-centric Nigerian venture secures $4.2 million backing, offering borrowing opportunities independent of traditional credit ratings.
Nigerian fintech startup, Carrot Credit, has raised $4.2 million in seed funding to expand its innovative credit platform across Africa. The company enables users to borrow funds using their digital investment assets, such as stocks, exchange-traded funds (ETFs), and cryptocurrencies, without selling their portfolios.
Founded by Bolu Aiki-Raji in 2023, Carrot Credit operates as a digital lending platform that connects directly to users' investment accounts via API integrations. This system bypasses the need for conventional credit scores, allowing users to access up to 40% of the value of their stable stock portfolios or up to 70% of their fixed-income assets like government bonds.
The company secures a lien on the assets while users maintain ownership, offering a liquidity solution without asset liquidation. Repayment terms are adjustable, with users having the option of fixed durations (3, 6, or 12 months) or flexible monthly payments.
Carrot Credit's innovative approach to lending has attracted attention from other startups, such as LockFi, Quick Lend, Lantern Finance, and SALT. However, the model is yet to fully take root in Africa. Carrot's B2B2C model targets fintechs, brokerages, and digital wealth managers across Africa, with the ambition to enhance the credit infrastructure and deepen integration with digital investment platforms.
The startup has already processed over $2 million in loans for over 10,000 users. Marlon Nichols, co-founder and partner of MaC Venture Capital, which led the funding round, expressed excitement about the investment, stating, "What excites me about this investment is how Carrot is leveraging digital assets to create a seamless, low-barrier credit solution in markets where credit has traditionally been out of reach."
As Carrot Credit continues to grow, it aims to make credit more accessible to Africa's younger, financially literate population and small business owners who often struggle to secure loans from traditional lenders due to limited credit scoring infrastructure.
- Venture capital firm MaC Venture Capital, co-founded by Marlon Nichols, has shown keen interest in the technology sector, with its latest investment being Nigerian crypto-focused startup, Carrot Credit.
- As many African startups in the fintech and technology spaces, such as LockFi, Quick Lend, Lantern Finance, and SALT, continue to emerge, Carrot Credit stands out for its unique approach to lending using digital assets like cryptocurrencies.
- To further empower small business owners and financially literate individuals in Africa, Carrot Credit plans to leverage venture capital funding to expand its business, deepen integration with digital investment platforms, and enhance the credit infrastructure across the continent.
