Lidya Collapses After Raising $16.45 Million

Nigerian-founded digital lender Lidya has officially closed its doors after years of financial turbulence — despite raising $16.45 million since its launch.

In an email to customers, the company confirmed its shutdown, stating that despite “best efforts to restructure and sustain operations, the company has encountered severe financial distress and is no longer able to continue in business.”

It added that due to its financial position, it could not process funds or settle any outstanding claims at the moment.

From Rapid Growth to Sudden Decline

Founded by former Jumia executives Tunde Kehinde and Ercin Eksin, Lidya once stood out for offering small and medium businesses fast, collateral-free loans through a fully digital platform.

In 2020, the firm expanded into Europe with new operations in Poland and the Czech Republic, and by the following year, it raised $8.3 million in a pre-Series B round to scale further. But by 2023, the company began retreating, exiting both European markets to refocus on Nigeria.

Customer Funds Frozen

Lidya’s final product, Lidya Collect, was designed to help businesses manage loan recovery and debt collection. However, users began reporting widespread issues — from failed transactions to frozen funds.

Customers said millions in transactions were stuck on the platform, forcing many to chase repayments manually.

Signs of internal trouble began surfacing in 2024, when co-founder Tunde Kehinde left in October, followed by CTO Cristiano Machado in September. Reports also revealed that the company’s tech team in Portugal was dissolved between May and September of the same year due to payroll problems.