Onepipe closes $4.8 million credit deal with TLG Capital

Onepipe, a startup that powers digital financial services, has closed a $4.8 million (₦ 2.25 billion) credit line from pan-African investment firm, TLG Capital. The deal, which had been in the works since the third quarter of last year, will power the startup’s inventory finance solution for small businesses. 

Onepipe operates a suite of solutions, including embedded payment and reconciliation services. According to the company’s CEO, Ope Adeoye, the terms of this deal will restrict the fund deployment to the inventories of small shops in the startup’s network.

“[We received] a revolving line [credit] specifically required to fund inventory finance for small shops via the FMCG distributors that work with us and the terms do not give us the latitude to use it for anything else,” Adeoye said in an email to TechCabal.

The deal was completed by the TLG Africa Growth Impact Fund (AGIF), a credit fund investing in sub-Saharan Africa. AGIF’s focus in the region converges mainly on SME investing. According to the company, such an investment thesis provides a nexus between social impact and commercial returns. 

Speaking to the importance of this fund, Adeoye told TechCabal in an email that Onepipe’s inventory finance solution is the startup’s fastest-growing service built on its core APIs. The CEO maintained that the company will now be focusing on specific embedded finance use cases—such as inventory finance.

Onepipe hopes to leverage the investment by TLG Capital to expand operations and become a premier provider of financial services to Nigeria’s informal sector in Nigeria. 

According to the International Labour Organization (ILO), the informal sector accounts for about 85% of employment in Africa. Improving financial access to this sector is therefore pivotal to economic development, job creation, and GDP growth. Onepipe believes its inventory finance solution is well positioned to bring financial flexibility to FMCG supply chains

“The absence of funds should not hinder the supply of goods. Within the chain of distribution, we empower distributors to offer inventory finance to retailers. We simply pay for the goods and the merchants can refund when they sell,” the company website reads.

Onepipe’s funding announcement comes as the company is letting go of about 20% of its employees, in a bid to streamline projects and adjust to the macroeconomic headwinds. The management team and CEO will also receive pay cuts as the company strives to extend its runway in what has been a challenging quarter for several tech companies.