Nigerian fintech startup Lidya has officially ceased operations due to critical financial challenges. The company had successfully secured around $16.45 million in funding from 2017 to 2021, including a notable $8.3 million pre-Series B investment.
In a communication sent to its users, Lidya disclosed that ongoing financial hardships have made it impossible to maintain business activities, leading to a complete shutdown. This closure ends the journey of a promising startup that had gained attention for its collateral-free lending solutions tailored to small enterprises.
“Despite extensive efforts to reorganize and keep the business afloat, the company has encountered insurmountable financial difficulties and can no longer operate. Consequently, all operations have been terminated,” the customer email stated.
Although Lidya had expanded beyond Nigeria into European markets, operational setbacks and leadership instability played significant roles in its eventual collapse.
Reports indicate that some clients still have funds trapped within the company. Additionally, small businesses collaborating with Lidya have been unable to access their payments for over a year. The company’s statement clarified that due to its current financial condition, it is unable to fulfill outstanding claims or process pending funds.
“Given the company’s financial position, it is presently unable to disburse funds or address claims,” the message explained.
Established in 2016 by ex-Jumia executives Ercin Eksin and Tunde Kehinde, the Lagos-based startup aimed to empower small business owners by providing quick access to working capital. Utilizing advanced credit-scoring algorithms and technology, Lidya assessed borrowers’ creditworthiness without requiring collateral, a model similar to other digital lenders.
Beyond lending, Lidya functioned as a digital ally for SMEs, offering users a digital account to manage customer databases. The platform enabled businesses to generate invoices featuring their company profiles, send them electronically to clients, and efficiently oversee cash flow, customer information, and payment tracking.
The downfall of Lidya, triggered by operational hurdles and leadership transitions, underscores the critical need for sustainable development within Africa’s fintech ecosystem.
Related Read: Discover how Lidya provided Nigerian SMEs with loans in just 48 hours.
Tracing Lidya’s Journey: From Expansion to Shutdown
After launching in 2016, Lidya quickly attracted substantial investment and broadened its footprint into European markets. The startup gained recognition for offering unsecured loans to small businesses and soon ventured into Poland and the Czech Republic.
A key advantage Lidya offered was the rapid loan processing and disbursement within 48 hours, with flexible repayment terms tailored to borrowers.
- May 2018: Secured $6.9 million in Series A funding led by Omidyar Network, a Silicon Valley-based philanthropic investor group.
- 2020: Expanded operations to Poland and the Czech Republic, aiming to distribute $1.1 billion in loans over five years to underserved small businesses.
- July 2021: Raised $8.3 million in a pre-Series B round, spearheaded by Alitheia Capital’s uMunthu Fund, to scale lending activities across its markets.
- 2023: Exited European markets due to operational difficulties.
- May 2024: Reports emerged that Lidya struggled to pay its Portugal-based tech team’s salaries, signaling deeper financial troubles.
- September 2024: Chief Technology Officer Cristiano Machado departed the company.
- October 2024: CEO Tunde Kehinde resigned and left the firm.
- 2024 – 2025: Financial instability worsened, preventing the release of customer funds and hindering new investment opportunities.
- October 2025: Official closure and cessation of all business activities.
At its height, Lidya evaluated credit applications exceeding $50 billion and disbursed over $150 million to more than 32,000 small enterprises, highlighting its significant impact before closure.