Kenya’s LipaLater raises $12m pre-series A funding as the buy now pay later startup seeks expansion into new markets in Africa.
LipaLater’s pre-series A is an equity and debt funding round that was led by Cauris Finance, SOSV IV LLC, Lateral Frontiers VC, GreenHouse Capital, Sayani Investments and Axian Financial Services.
The new funding round comes after an undisclosed 2020 investment by Tokyo-based Uncovered Fund; A VC fund that invests in early and seed-stage start-ups in Africa. Lipa Later is One of five start-ups that received this funding from Uncovered Fund.
LipLater, founded in 2018, is a buy now pay later (BNPL) company currently existing in markets like Kenya, Uganda and Rwanda. This credit fintech company plans to expand into new markets like Nigeria, Tanzania and Ghana with this $12m pre-series A funding.
Lipa Later leverages exclusive retail partnerships across different consumer segments to allow people to pay for products; furniture, electronics and even perishables in monthly instalments. One such partnership is with French multinational retail corporation Carrefour (the eighth-largest retailer in the world by revenue), Customers using Lipa Later to get credit extended to them for them to buy products can pay a monthly interest rate of up to 2.3% (for Carrefour retail outlets).
As Lipa Later enters new markets it will look to establish new partnerships with merchants and retail companies even as they grow the old ones.
Ruby Nimkar, Partner ar GreenHouse capital, who participated in the pre-series A round had this to say about Lipa Later:
While LipaLater’s co-founder and CEO, Eric Muli had this to say about the startup’s $12m Pre-series A funding
“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,” said Lipa Later co-founder and CEO.
How LipaLater Works
Lipa Later’s allows you to sign up to its platform and instantly offers you a credit limit. This consumer credit company is able to do this through its proprietary credit scoring and machine learning system, alongside a BNPL API that integrates into third-party e-commerce platforms.
Merchants can sell products directly to consumers on an instalment basis while getting all their money upfront from LipLater. Allowing consumers to pay for products with monthly instalments.
Lipa Later is one of the biggest players in the Kenyan Buy Now Pay Later market, However, the market is rife with other competitors such as Aspira, Miti, Flexpay Technologies and Julla.
Africa BNPL sector as it with other fintech segments on the continent is seeing massive adoption and growth due to the growing internet penetration and the ever-expanding e-commerce opportunities.
According to this 2021 survey about Kenya, the BNPL payment industry in the country experienced a strong growth due to a rapid e-commerce penetration, and the effects of the economic slowdown due to the COVID-19 pandemic.
Meanwhile, Kenya’s BNPL industry is expected to reach a CAGR of 30.8% from 2021 to 2028. The country’s Gross BNPL merchandise value is expected to reach $589.5 million by 2028, up from $51.6 million in 2020.