It is widespread knowledge that the continent of Africa is filled with many opportunities when it comes to business. Thanks to the pandemic, a service famously referred to as buy-now-pay-later (shortened as BNPL) has taken over the world. This service has begun to make its way into Africa thanks to fintech startups that bring financial services closer to the people, saving them the stress and irksome peculiarities associated with the traditional financial system.
Lipa Later, a Kenyan fintech startup providing buy-now-pay-later (BNPL) services has raised $12 million in a Series A equity and debt funding round which saw the participation of Cauris Finance, Lateral Frontiers VC, GreenHouse Capital, SOSV IV LLC, Axian Financial services and Sayani Investments.
Thanks to the new funds, Lipa Later which was founded in 2018 will be able to take on its expansion plans. The startup has plans of venturing into other African territories including Nigeria, Ghana and Tanzania. The startup will also increase focus on its already existing markets – Kenya, Rwanda and Uganda.
Speaking on the expansion plans, Lipa Later’s CEO and co-founder Eric Muli said that “We are excited to be working with our investors as we look to grow and expand to more markets in Africa. In the next 12 months, we are looking to grow and double our presence in the existing markets, even as we open in three to five new markets in Africa”.
Lipa Later applies operation models of other global brands such as AfterPay. The startup has partnerships with retailers in markets where it exists and this partnership allows people to make payments from these exclusive shoppers in instalments. Users are charged a monthly interest rate for using the buy-now-pay-later service.
Speaking on the startup, Ruby Nimkar, a partner at GreenHouse Capital said that “Lipa Later is not only changing the consumer credit landscape across Africa, which to date has been largely inaccessible for most but also catalyzing the future of shopping, e-commerce and payments. They’ve done this in a truly product and customer-led way that benefits both merchants and consumers, and has proven to be incredibly scalable across multiple markets”.