Nigerian Startup Raises $4.2M To Offer Loans Based On Your Investments Instead Of Credit Scores
Nigerian fintech startup, Carrot Credit, has raised $4.2 million in seed funding to expand its credit platform across Africa. The startup offers users loans backed by digital investment assets, including stocks, exchange-traded funds (ETFs), and cryptocurrencies. The funding round was led by US-based MaC Venture Capital, with participation from Authentic Ventures, as reported by TechCabal.
What does Carrot Credit do?
Carrot Credit is a digital lending platform that enables individuals to borrow money without selling their investment portfolios, including ETFs, bonds, or cryptocurrencies. It was founded by Bolu Aiki-Raji in 2023. Instead of relying on traditional credit scores, it connects to users’ investment accounts, varying from stocks and ETFs to fixed-income instruments such as government bonds, and assesses their holdings to offer credit lines.
Users can access up to 40% of their stock portfolio’s value. For uncertain stocks, Carrot provides users with a credit line of up to 10% of their portfolio and up to 70% for fixed-income assets. Through API integrations, the platform secures a lien on these assets, allowing users to maintain ownership while leveraging their value.
Loan repayment terms are adjustable; users can obtain fixed durations of 3, 6, or 12 months or adjustable monthly payments.
Carrot Credit influencing other startups
Firms like LockFi, Quick Lend, Lantern Finance, and SALT have taken Carrot’s approach to lending. However, the model has yet to take off in Africa. Carrot’s embedded B2B2C model targets fintechs, brokerages, and digital wealth managers across Africa. The startup has already processed over $2 million in loans to over 10,000 users.
“What excites me about this investment is how Carrot is leveraging digital assets to create a seamless, low-barrier credit solution in markets where credit has traditionally been out of reach,” said Marlon Nichols, co-founder and partner of MaC Venture Capital.
Image: Carrot Credit
