Kenyan BNPL startup Lipa Later raises $12m to develop throughout Africa

Lipa Later, a Kenyan buy-now-pay-later (BNPL) firm, has raised $12 million pre-series A to develop throughout Africa. This brings the corporate’s complete funding to about $16 million to this point.

The funding, which is a mixture of fairness and debt, was co-led by GreenHouse Capital and Lateral Frontiers VC, which led the corporate’s seed funding. The spherical additionally noticed participation from Cauris Finance, SOSV IV LLC, Sayani Investments, and Axian Monetary Companies. 

The corporate stated this new fund will permit them to offer their buy-now-pay-later providers to its present pipeline of shoppers, solidify their presence in present markets—Kenya, Uganda, Rwanda—and develop into new markets comparable to Nigeria, South Africa, Ghana, and Tanzania. 

Based in 2018 by Eric Muli, Lipa Later began as a programme to assist inner staff entry cell phones that’d permit them to be environment friendly at work. Muli had initially based Alpha Pressure Safety Ltd, an organization that dispatches safety guards to properties and places of work in Kenya.

In 2017, Alpha Pressure began a cell phone financing programme for his or her staff—particularly their guards—however discovered there was no firm providing a cell phone BNPL resolution, in order that they determined to deal with it themselves.

“We began trying round to see if there’s a BNPL platform within the area, however there was none. So, at that time, we simply did it ourselves,” Muli advised TechCabal over a name.

In 2017, there was no BNPL firm centered on cell phones in Kenya; those obtainable, like M-Kopa, are largely into solar energy. So Lipa Later capitalised on this all through 2017 and put a whole bunch of cell phones within the fingers of their staff and later exterior individuals.

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Serving to their staff to get cell phones was a form of pilot; it introduced them near the market and, in consequence, they realised that for each one Alpha guard that acquired a telephone, there have been a whole bunch of individuals outdoors who wanted one however couldn’t afford it. So, after some analysis, Muli and his group grew to become sure that they might prolong this resolution to extra Kenyans; and in 2018, they constructed a tech-enabled product and launched it to the general public.

Inside 3 years of operation, Lipa Later prolonged its affords into extra retail choices like electronics, furnishings, house home equipment, and many others. 

Apart from the normal offline technique of consumers buying gadgets in shops, Lipa Later has tapped into the quickly rising on-line presence throughout Africa and constructed a novel BNPL possibility API that integrates into e-commerce platforms and permits retailers to promote merchandise on to shoppers and pay for them in inexpensive month-to-month installments.

“Lipa Later shouldn’t be a BNPL platform for less than telephones; it’s for something that’s retail. Once we began out, we had been doing issues closely manually. However we’re now absolutely tech-enabled; we combine straight into e-commerce platforms and cost gateways.” 

Muli stated the corporate additionally affords an offline resolution for the retailers and small-scale retailers that haven’t but moved on-line. He additionally stated Lipa Later has served about 200,000 prospects up to now and maintained a 100% year-on-year development.

Lipa Later’s proprietary credit score scoring and machine studying system allow the patron to enroll and get a credit score restrict in seconds with out the necessity for cumbersome documentation and a prolonged credit score approval course of.

Talking concerning the funding, Samakab Hashi, Companion at Lateral Frontier VC, one in every of Lipa Later’s first and lead traders, stated, “Over the previous few years, we now have watched Eric and his group put collectively the constructing blocks for pan-African enlargement, and this spherical of funding takes Lipa Later one step nearer to being the dominant BNPL participant on the continent.” 

“We’re excited to be working with our traders as we glance to develop and develop to extra markets in Africa. Within the subsequent 12 months, we want to develop and double our presence within the current markets, at the same time as we open in 3–5 new markets in Africa,” Muli stated in a press release made obtainable to TechCabal.

“Lipa Later shouldn’t be solely altering the patron credit score panorama throughout Africa, which to this point has been largely inaccessible for many, but additionally catalysing the way forward for procuring, e-commerce, and funds,” stated Ruby Nimkar, Companion at GreenHouse Capital. “They’ve carried out this in a real product- and customer-led manner that advantages each retailers and shoppers and has confirmed to be extremely scalable throughout a number of markets.”

The BNPL motion is waxing robust in Africa and so is the competitors it brings. Lipa Later, regardless that it’s one of many early corporations within the area in Kenya, has a whole lot of corporations with the capital warfare chest to contend market share with. There’s M-Kopa—which have since expanded into telephones and retail merchandise—in Kenya and Uganda. There are additionally CDCare, PayQart, Carbon, and even M-Kopa in Nigeria, the place it simply went stay on Monday. In South Africa, there are PayJustNow and Payflex—which was lately acquired by Australian BNPL Zip.

However Muli was positive that they don’t solely have what it takes to compete however to emerge as business leaders within the new market. One among Lipa Later’s playing cards is its big range of unique retailers and world-renowned manufacturers comparable to Carrefour, Apple, Tecno, Samsung simply to say a couple of, a technique it has used to remain atop the market in East Africa and one it intends to hold alongside to the brand new markets. 


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