Lipa Later, one of the pioneer buy-now-pay-later (BNPL) companies with operations in Kenya, Rwanda, Uganda, and Nigeria, has raised $12 million from a consortium of investors.
The funding, which is a mix of equity and debt, will help Lipa Later expand within its current markets (Kenya, Uganda, Rwanda) and into new markets such as Nigeria, Ghana, and Tanzania. It will also allow Lipa Later to provide its Buy-Now-Pay-Later services to its substantial current pipeline of consumers supporting Lipa’s exclusive partnerships with world-class merchants in sub-Saharan Africa.
Lipa Later, which was founded in Kenya in 2018, has built a reputation for delivering value for its investors right from its early days; the company’s recent round of funding attracted backing from Cauris Finance, Lateral Frontiers VC, GreenHouse Capital, SOSV IV, Sayani Investments and Axian Financial Services.
Speaking about the investment, Samakab Hashi, Partner at Lateral Frontier VC, one of Lipa Later’s first investors, said, “Over the last few years, we have watched Eric Muli, CEO of Lipa Later and his team put together the building blocks for Pan-African expansion and this round of funding takes Lipa Later one step closer to being the dominant Buy-Now-Pay-Later player on the continent.”
Other than the traditional offline method of buyers purchasing items in stores, Lipa Later has tapped into the rapidly growing online presence across Africa and built a unique Buy Now Pay Later option API that integrates into e-commerce platforms enabling merchants to sell products directly to consumers and pay for them in affordable monthly installments.
Lipa Later’s proprietary one-of-a-kind credit scoring and machine learning system enables the consumer to sign up and get a credit limit in seconds without the need for bulky documentation and a long lengthy credit approval process.
“With formal credit available to only a tiny minority in Lipa Later’s target markets, we are excited to be supporting Lipa Later and its unique capabilities in bolstering consumer credit in the region,” said Azer Songnaba, the co-counder and Chief Investment Officer of Cauris.
Ruby Nimkar, Partner at GreenHouse Capital added: “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,” she explained.
In appreciation of his new investors, Eric Muli, the co-founder and CEO of Lipa Later said: “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.”