TLG Capital, a pan-African alternative investments firm, has partnered OnePipe to provide credit services to the informal sector in Nigeria.
The firm provided up to N2.25 billion in a collateralised credit facility for OnePipe, a Nigerian financial infrastructure company that uses its technology platforms to enable traditional businesses bring financial services into their operations.
The deal was completed by the TLG Africa Growth Impact Fund (AGIF) and represents TLG Capital’s 34th investment. The investment will be used to provide inventory finance to small shops in Nigeria.
OnePipe is a fast-growing financial infrastructure company that enables merchants to access goods on credit from larger distributors who work with OnePipe. The company has built an extensive network of field officers and partners, including banks, and payment service providers.
OnePipe also has secured a strong roster of equity investors, including Atlantica Ventures, P1 Ventures, Norrsken Foundation, Techstars, Tribe Capital, V&R Associates, Canaan Partners, DFS Labs, Ingressive Capital, Acquity, Raba, Saison Capital, The Fund, and Two Culture Cap.
The investment by TLG Capital will allow OnePipe to expand its operations with a vision of becoming a leading provider of financial services to the informal sector in Nigeria.
According to the International Labour Organization (ILO), the informal sector accounts for over 85% of employment in Africa. Providing financial access to this sector is crucial for economic development and poverty reduction. OnePipe’s model is well-positioned to address this need, and TLG Capital’s investment will help to support this effort.
CEO of OnePipe, Ope Adeoye, said: “TLG’s extensive experience structuring debt in Nigeria and their deep network across Africa, particularly in venture, made them the partner of choice as we look to scale. TLG is our first debt partner and has been a powerful resource in planning our growth and balance sheet strategy. Through this partnership, we’re looking to build the infrastructure to provide credit and payment services to the two-thirds of Nigerian business owners who don’t have access to effective and practical banking services.”
Investment professional at TLG, Isaac Marshall, said: “Nigeria’s $220 billion cash-based informal sector comprises 38 million enterprises that are the most neglected segment of Nigerian businesses, avoided by both the fintechs and traditional financiers. With a clever product to help these businesses to obtain both credit and better purchasing terms on their goods, OnePipe has pioneered a model that can provide sustainable income growth to tens of millions of micro-enterprises.”
TLG Capital’s investment in OnePipe aligns with several Sustainable Development Goals (SDGs), including SDG 1 (No Poverty), SDG 8 (Decent Work and Economic Growth), and SDG 9 (Industry, Innovation and Infrastructure).
By providing credit to informal micro-businesses, OnePipe is helping to create sustainable income growth and promote economic development.