Carrot Credit, a Nigerian fintech startup, has secured $4.2 million in seed funding to expand its innovative lending platform across Africa. The funding round was led by MaC Venture Capital, with participation from Partech Africa and Authentic Ventures, demonstrating investor confidence in the company's mission to redefine credit access for retail investors on the continent. Founded in 2023 by Boluwatife Aiki-Raji, Carrot Credit enables retail investors to borrow money using their investment portfolios—stocks, ETFs, bonds, or cryptocurrencies—as collateral, without needing to liquidate their assets or undergo traditional credit checks.

The platform integrates with digital investment platforms via APIs to verify users’ asset positions and place liens on them. This allows borrowers to access credit lines of up to 40% of the value of stable stock portfolios, 10% for volatile stocks, and 70% for fixed-income assets such as government bonds and treasury bills. For example, a user with a ₦1 million portfolio of stable stocks could borrow up to ₦400,000, while those holding fixed-income assets could access up to ₦700,000. This model addresses a significant gap in Africa’s financial ecosystem, where access to credit is often limited by stringent requirements and high interest rates.

Carrot Credit offers flexible loan repayment options, including fixed repayment periods of 3, 6, or 12 months, or monthly payments at the user's preferred pace. The company claims its interest rates are below the market average, making it an attractive option for retail investors. Since its launch, Carrot has processed over $2 million in loans and amassed a user base exceeding 10,000, demonstrating significant traction in Nigeria’s competitive fintech landscape.

The $4.2 million seed funding will enable Carrot to scale its credit infrastructure, expand its team, and deepen integrations with digital investment platforms across Africa. The company operates with an embedded B2B2C model, targeting partnerships with fintechs, brokerages, and digital wealth managers to broaden its reach. This approach aligns with the growing trend of embedded finance in Africa, where seamless financial solutions are integrated into non-financial platforms to enhance user experiences. Carrot’s asset-backed lending model is inspired by global players like BlockFi and Robinhood but aims to make asset-backed lending more accessible to everyday investors in Africa.

Aiki-Raji, CEO and co-founder of Carrot Credit, explained, “People were investing in all types of things – stocks, crypto, fixed income – but many didn’t recognise those investments as worth anything. That was the initial idea: Why can’t this be collateral?” The startup faces competition from established Nigerian digital lenders such as Sycamore, Carbon, FairMoney, and Aella Credit, which primarily focus on short-term, unsecured loans. Carrot differentiates itself through its asset-backed model, flexible repayment terms, and competitive interest rates. By leveraging digital assets as collateral, Carrot eliminates the need for traditional credit scoring, which often excludes individuals with limited credit histories, a common challenge in Africa.

Marlon Nichols, co-founder and partner at MaC Venture Capital, expressed enthusiasm for Carrot’s vision, stating, “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.” The involvement of prominent investors underscores the potential of Carrot’s model to transform Africa’s credit landscape. Industry analysts view Carrot’s approach as a timely response to the growing adoption of digital investments in Africa, with retail participation in African stock markets surging and crypto adoption growing rapidly.

Carrot’s ability to tap into these trends positions it as a pioneer in alternative lending on the continent. As embedded finance gains momentum in Africa, Carrot’s model could pave the way for broader credit access among digital investors. The startup’s focus on partnerships with fintechs and wealth managers aligns with the continent’s shift toward integrated financial services. With the new funding, Carrot plans to expand its operations beyond Nigeria, targeting key African markets with growing digital investment ecosystems. The company also aims to enhance its technology stack, improving the efficiency of its API-driven lending process and ensuring robust risk management to protect both borrowers and investors.