Lipa later, a Kenyan technology-centric consumer credit platform, plans to expand into new markets in Africa after raising $ 12 million in pre-Series A funding.
Cauris Finance, Lateral Frontiers VC, GreenHouse Capital, SOSV IV LLC, Sayani Investments and Axian Financial Services took part in the equity and debt financing round.
The startup, a buy-now-pay-later (BNPL) company, founded in 2018, is now planning to enter Tanzania, Ghana and Nigeria and expand in the existing markets of Kenya, Uganda and Rwanda.
“We look forward to working with our investors to grow and expand into additional markets in Africa. Over the next 12 months we aim to grow and double our presence in existing markets while opening three to five new markets in Africa, ”said Lipa Later Co-Founder and CEO Eric Muli.
Lipa Later has exclusive partnerships with retailers in these markets that allow shoppers to pay for products in installments. 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 perishable goods in monthly installments.
The customer pays a monthly interest rate (at Carrefour approx. 2.3%) on the credit granted to him. The startup plans to further partner with dealers to cover more countries across Africa.
(from right to left) Franck Moreau Country Manager – Carrefour East Africa and Eric Muli CEO Lipa Later on the launch of the LipaVismart product powered by Lipa Later. Photo credits: Lipa later.
“Lipa Later is not only changing the consumer credit landscape across Africa, which has been largely inaccessible to most, but it is also catalyzing the future of shopping, e-commerce and payments. They have done this in a truly product and customer centric way that benefits both retailers and consumers and has proven to be incredibly scalable in multiple markets, ”said Ruby Nimkar, partner at GreenHouse Capital.
Lipa Later’s proprietary credit scoring and machine learning system allows consumers to sign up and receive a credit limit almost instantly. The startup has also developed a BNPL API that integrates with e-commerce platforms that enables merchants to sell products directly to consumers and enables consumers to transfer monthly payments on items purchased.
The new funding complements an undisclosed investment by the Tokyo-based Uncovered Fund in 2020, which invests in startup and seed-stage startups in Africa. Lipa Later was one of five startups to receive funding.
Lipa Later is one of the leading players in the Kenyan BNPL market, where it competes with Aspira, Miti, Flexpay Technologies and Julla. According to this 2021 survey of Kenya, the country’s BNPL payments industry has seen strong growth due to rapid penetration of e-commerce and the impact of the economic slowdown due to the COVID-19 pandemic. The BNPL industry in Kenya is expected to experience a CAGR of 30.8% between 2021 and 2028. The gross BNPL merchandise value is projected to reach $ 589.5 million in 2028, up from $ 51.6 million in 2020.
In its attempt to cross Africa, where e-commerce and alternative sources of credit offer ample opportunity, Lipa Later faces competition from South Africa’s Payflex (which was recently acquired by the Australian BNPL Zip) and PayJustNow as well as PayQart and Carbon Zero from Nigeria.
