Nigerian digital lender Sycamore is raising ₦1 billion ($628,000) to complete a $1.5 million debt round. This move comes just one week after the company secured ₦1.5 billion ($943,000) in debt funding from Cascador, a local entrepreneurship accelerator. The six-year-old lender plans to use the fresh capital to increase its loan offerings to meet rising credit demand from individuals and small businesses.
Based in Lagos, Sycamore disbursed over $5.5 million in loans during 2024. It also reported more than $3.5 million in total revenue, with $1.5 million earned this year alone — a 115% increase compared to 2023. The company now serves 300,000 users through its peer-to-peer lending platform and aims to issue over 10,000 new loans with the combined $1.5 million funding. Sycamore also hopes to reach 5,000 to 10,000 more businesses within the next year.
Founded in 2019, Sycamore offers working capital loans to businesses starting from ₦500,000 ($314) and going as high as ₦20 million ($12,500).
Raising local debt helps Sycamore grow without selling company shares. With local funding, the company can recycle cash into more profitable loans and extend repayment plans up to one year. Cascador’s debt comes with an interest rate 10% lower than the usual market rate, giving Sycamore a cost advantage.
“Debt allows us to grow the loan book without giving up equity,” said CEO Babatunde Akin-Moses. “We had to find a better solution when loan demand began to rise faster than our regular funding could support.”
Sycamore Avoids Dollar Risks by Raising in Naira
In the last 18 months, the Nigerian naira has lost 75% of its value due to economic reforms and record inflation. This currency drop makes it harder for startups that raised money in dollars but earn in naira to deliver strong returns. Sycamore avoided this issue by raising funds in local currency instead of foreign ones.
“The Cascador deal was initially meant to be $1 million,” Akin-Moses explained. “But we asked ourselves—if the naira hits ₦2,000 to the dollar, do we want to repay ₦2 billion? So, we agreed to do the deal in naira at ₦1.5 billion.”
Sycamore joins other Nigerian startups like FairMoney in turning to local debt markets to finance their growth. FairMoney, for example, uses commercial papers to fund its loan services.
If Sycamore successfully raises the additional ₦1 billion, it will become part of a growing trend. In 2024, African startups raised $3.2 billion, and a third of that came from debt funding. According to Partech, the number of debt deals in Africa grew slightly by 4% from 2023, reaching 77 transactions.
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