African markets

Kenyan BNPL startup Lipa Later targets more African markets after raising $12m – TechCrunch

Lipa Later, a Kenyan tech-led consumer finance platform, plans to expand into new markets in Africa after raising $12m in pre-Series A funding.

The equity and debt financing round was led by Cauris Finance, Lateral Frontiers VC (one of Lipa Later’s early investors) and GreenHouse Capital, with participation from SOSV IV LLC, Sayani Investments and Axian Financial Services.

The startup, a Buy Now, Pay Later (BNPL) company founded in 2018, now plans to enter Tanzania, Ghana and Nigeria, and expand into its existing markets of Kenya, Uganda and Nigeria. Rwanda.

“We are excited to work with our investors as we seek to grow and expand into more markets in Africa. Over the next 12 months, we are looking to grow and double our presence in existing markets, even as we open three to five new markets in Africa,” said Eric Muli, co-founder and CEO of Lipa Later.

Commenting on this latest funding round, Lateral Frontiers VC Partner Samakab Hashi said, “This latest funding round leaves them well positioned to expand their product offering and brings Lipa Later one step closer to becoming the dominating Buy-Now-Pay-Later. on the continent.

Lipa Later has exclusive partnerships with retailers in these markets allowing buyers to pay for products in instalments. For example, Lipa Later’s partnership with French retailer Carrefour (which has a regional presence) allows customers to pay for items such as furniture, electronics, and even perishables in monthly installments.

Customers pay a monthly interest rate (about 2.3% in the case of Carrefour) on the credit granted to them. The startup plans to forge more partnerships with merchants in its plan to cover more countries across Africa.

(From right to left) Franck Moreau, Country Manager – Carrefour East Africa, and Eric Muli, CEO Lipa Later, marking the rollout of the LipaVismart product powered by Lipa Later. Picture credits: Lipa later.

“Lipa Later is not only changing the consumer credit landscape across Africa, which to date has been largely inaccessible to most, but is also catalyzing the future of shopping, e-commerce and payments. They’ve done this in a truly product- and customer-centric way that benefits both merchants and consumers, and has proven to be incredibly scalable across multiple markets,” said GreenHouse Partner Ruby Nimkar. Capital.

Lipa Later’s proprietary credit scoring and machine learning system allows consumers to sign up and get a credit limit almost instantly. The startup has also built a BNPL API that integrates with e-commerce platforms that allows merchants to sell products directly to consumers and allows consumers to pay monthly installments for purchased items.

The new funding comes on top of an undisclosed 2020 investment by Tokyo-headquartered Uncovered Fund, which invests in early-stage and seed-stage startups in Africa. Lipa Later was among five startups that received the funding.

Lipa Later is among the major players in the Kenyan BNPL market, where it competes with Aspira, Miti, Flexpay Technologies and Julla. According to this 2021 Kenya survey, the BNPL payment industry in the country has witnessed strong growth owing to rapid e-commerce penetration and the effects of the economic downturn due to the COVID-19 pandemic. BNPL industry in Kenya is expected to register a CAGR of 30.8% from 2021 to 2028. BNPL gross merchandise value is expected to reach USD 589.5 million in 2028, from USD 51.6 million in 2020.

In its attempt to cross Africa, where opportunities abound as e-commerce and alternative sources of credit expand, Lipa Later will face competition from South African companies Payflex (which was recently acquired by the BNPL Zip) and PayJustNow, and Nigerian companies PayQart and Carbon Zéro.