Kenyan Buy-Now-Pay-Later (BNPL) startup LipaLater raised $12 million a few weeks from a consortium of investors to expand into more African markets and dominate the existing market.
From Employee Phone Financing Programme To A Multimillion-Dollar BNPL Startup
Founded in 2018 by Eric Muli, LipaLater started as a programme to help internal employees access mobile phones that’d allow them to be efficient at work. Muli had initially founded Alpha Force Security Ltd, which dispatches security guards to homes and offices in Kenya.
In 2017, Alpha Force started a mobile phone financing programme for their employees—especially their guards—but found out there was no company offering a mobile phone BNPL solution in Kenya; the ones available, like M-Kopa, are primarily into solar power, so they decided to tackle it themselves.
Having helped their employees to get mobile phones, this brought them close to the market and, as a result, they realised that there were hundreds of people outside who needed one but couldn’t afford it. So, after some research, Muli and his team became sure that they could extend this solution to more Kenyans; in 2018, they built a tech-enabled product, LipaLater and launched it to the public.
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LipaLater extended its offers into more retail options like electronics, furniture, home appliances, etc., within three years of operation.
Besides the traditional offline method of buyers purchasing items in stores, LipaLater has tapped into the rapidly growing online presence across Africa and built a unique BNPL option API that integrates into e-commerce platforms and enables merchants to sell products directly to consumers pays for them at affordable monthly instalments.
About LipaLater
LipaLater is a BNPL startup that helps retailers sell their products to customers on credit, at the point of sale, with customers paying for their purchases in affordable, monthly instalments. It leverages data analytics to provide consumers with convenient and affordable credit for purchasing items in stores. Its proprietary credit-scoring and machine learning system enable a consumer to sign up and get a credit limit in seconds, without the need for bulky documentation and a lengthy approval process.
The company also offers an offline solution for merchants and small-scale retailers that have not yet moved online. Since it was launched in 2018, LipaLater has served about 200,000 customers and maintained a 100% year-on-year growth.
Dominating African Market with $12M in pre-Series A Funding
The pre-Series A funding, a mix of equity and debt, was co-led by Cauris Finance, Lateral Frontiers VC (one of LipaLater’s first investors) and GreenHouse Capital, with participation from SOSV IV LLC, Sayani Investments and Axian Financial Services.
The company disclosed that this new fund would improve its BNPL services to its current stream of consumers, dominate in their existing markets—Kenya, Uganda, Rwanda—and expand into new markets such as Nigeria, South Africa, Ghana, and Tanzania.
Speaking about the funding, Samakab Hashi, Partner at Lateral Frontier VC, ****said, “Over the last few years, we have watched Eric, and his team put together the building blocks for pan-African expansion, and this round of funding takes LipaLater one step closer to being the dominant BNPL player on the continent.”
“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 LipaLater co-founder and CEO Eric Muli.
“LipaLater 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,” said Ruby Nimkar, Partner at GreenHouse Capital. “They’ve done this in a true product- and the customer-led way that benefits both merchants and consumers and has proven to be incredibly scalable across multiple markets.”
While LipaLater can be said to be one of the early BNPL companies in the space in Kenya, there are a lot of companies with the capital war chest to contend market share, especially with the expansion to the new regions. There is M-Kopa—which have since expanded into phones and retail products—in Kenya and Uganda. There are also CDCare, PayQart, Carbon, and even M-Kopa in Nigeria, where it is now playing. In South Africa, there are PayJustNow and Payflex—which Australian BNPL Zip recently acquired.
But Eric Muli was sure that they have what it takes to compete and emerge as industry leaders in the new market. One of LipaLater’s cards is its wide array of exclusive merchants and world-renowned brands such as Carrefour, Apple, Tecno, Samsung, to mention a few, a strategy it has used to stay atop the market in East Africa and one it intends to carry along to the new markets.