Nigerian fintech Payaza has achieved a significant milestone in alternative startup funding, securing approval from Nigeria’s Securities and Exchange Commission (SEC) to raise an additional ₦20 billion under its ambitious ₦50 billion commercial paper programme. This approval represents a growing trend of African startups exploring debt financing alternatives to traditional venture capital routes.
Regulatory Milestone and Market Confidence
The SEC approval follows earlier authorization from FMDQ Exchange in December 2024, completing the regulatory framework needed for Payaza’s continued capital raising efforts. For CEO Seyi Ebenezer, this represents more than just funding approval—it’s a validation of the company’s business model and strategic direction.
“This SEC approval is incredibly significant for us at Payaza. It’s a profound vote of confidence from the market in our business model, our financial health, and our strategic vision for the African payments landscape,” Ebenezer stated.
The approval enables Payaza to proceed with Series 3 and Series 4 of its commercial paper programme, providing the flexibility to access capital strategically rather than through a single large issuance.
Strategic Capital Deployment Through Tranched Approach
Payaza’s decision to structure its ₦50 billion programme across multiple tranches reflects sophisticated capital planning that optimizes for market conditions and specific funding requirements. This approach contrasts with traditional startup fundraising models that typically involve large, infrequent equity rounds.
“This approach of issuing in multiple tranches is a core benefit of our overall ₦50 billion programme. It allows us to strategically access capital as needed, optimising for market conditions and our specific funding requirements, rather than attempting one massive raise,” Ebenezer explained.
This flexibility has already proven successful through the company’s previous Series 1 and Series 2 issuances, establishing a track record that supports continued investor confidence.
Proven Track Record Builds Market Trust
Payaza’s credibility in the commercial paper market received significant validation in June when the company successfully repaid ₦14.9 billion from its Series 1 issuance. This milestone demonstrates that Nigerian startups can access substantial capital through non-traditional channels while maintaining the discipline required for debt servicing.
The successful repayment was years in the making, with Ebenezer noting that the company had deliberately undergone extensive processes to build market trust in the Payaza brand. This long-term approach to relationship building has positioned the company as a reliable partner for institutional investors seeking exposure to African fintech growth.
Growing Investor Appetite for Alternative Structures
The approval comes at a time when investor appetite for non-equity funding structures is expanding across Africa’s startup ecosystem. Commercial paper programmes offer attractive alternatives for companies seeking to scale without immediate equity dilution, while providing institutional investors with exposure to high-growth fintech companies.
Payaza reports significant investor interest in the upcoming tranches, suggesting strong market confidence in both the company’s specific prospects and the broader viability of commercial paper as a startup funding mechanism.
Company Positioning and Market Opportunity
Founded in 2020, Payaza has established itself as a pan-African payment infrastructure provider, focusing on seamless transaction capabilities for individuals and businesses across the continent. The company’s service portfolio spans collections, disbursements, and white-label solutions, addressing critical pain points in cross-border payments.
This positioning aligns with growing demand for reliable payment infrastructure as African economies increasingly digitize and regional trade expands. Payaza’s reputation for flexibility and reliability in cross-border payments has created a strong foundation for continued growth.
Capital Deployment Strategy
The fresh capital will support three key strategic initiatives: infrastructure expansion, product portfolio scaling, and deeper market penetration across Africa. This deployment strategy reflects Payaza’s commitment to building comprehensive payment infrastructure that can support the continent’s growing digital economy.
Infrastructure expansion will likely focus on improving transaction processing capabilities and reducing settlement times across different African markets. Product scaling may involve developing new financial services that leverage Payaza’s existing payment rails, while geographic expansion will deepen the company’s presence in key African markets.
Implications for African Fintech Funding
Payaza’s success with commercial paper issuances could influence how other African fintechs approach capital raising strategies. The model demonstrates that companies with strong business fundamentals and proven track records can access substantial debt financing, providing an alternative to equity-focused venture capital.
This development is particularly significant given the challenges many African startups face in accessing late-stage venture capital. Commercial paper programmes offer a pathway to scale that doesn’t require surrendering equity or control, making them attractive for companies with established revenue streams and predictable cash flows.
Market Validation and Future Outlook
The regulatory approvals and strong investor interest validate both Payaza’s specific business model and the broader potential for commercial paper as a startup funding mechanism in Nigeria. Success in completing the ₦20 billion raise would further establish precedent for other fintechs considering similar approaches.
For the Nigerian fintech ecosystem, Payaza’s programme represents an important evolution in funding sophistication. As the market matures, access to diverse capital sources becomes increasingly important for supporting sustainable growth.
Setting Industry Precedents
Payaza’s commercial paper success may influence how investors and regulators view startup debt financing across Africa. The company’s disciplined approach to debt servicing and strategic capital deployment provides a template for other fintechs seeking to diversify their funding sources.
The programme also demonstrates the growing sophistication of Nigeria’s capital markets, with regulatory frameworks that can support innovative funding structures while maintaining appropriate oversight and investor protection.
As Payaza moves forward with its Series 3 and Series 4 issuances, the fintech sector will be watching closely to see whether this alternative funding model can sustain the growth trajectories traditionally supported by venture capital, potentially reshaping how African startups think about scaling their operations.