CredPal has secured $15 million to scale Buy Now Pay Later in Africa.
Due to economic instability and low trust issues, the penetration of pay-later (credit) cards has not always been a viable financing option. But startups like Credpal and Lipa Later, are thus far, successfully navigating this complex sector.
Buy Now Pay Later (BNPL) is a short-term financing option that allows individuals/businesses purchase items and claim immediate ownership by paying a portion of the cost now and spreading the balance over an agreed period.
The emerging startups in the BNPL sector indicates that the financing option is gaining traction. According to a report, the BNPL payment option in Nigeria was expected to grow by 59.3% on an annual basis and reach $325.4 million at the end of 2021.
Credpal, one of the founding BNPL platforms in Nigeria has announced a bridge round raise of $15 million in equity and debt. The funding which comprises more of debt will be used to expand consumer credit offerings across Africa markets such as Cameroon, Egypt, Ghana and Kenya.
The Y Combinator and Google-backed startup was launched in 2018 by Fehintola Olaogun (CEO) and Olorunfemi Jegede (COO) to address the lack of consumer credit options on the continent. Credpal allows instalment payment for purchases both online and offline for both small items as low as ₦2,000 to large items as high as ₦5 million.
The funding announcement coincides with a new partnership with Airtel Nigeria to foster digital inclusion for low and middle-income earners with BNPL.
In the PR provided to us at Benjamindada.com, Fehintolu Olaogun, CredPal’s CEO and co-founder stated “We are delighted to have the support of our investors and partners as we complete this fundraise. Our commitment to better credit facilities for African consumers and helping sellers grow their sales is getting a huge boost with these latest milestones”.
Existing backers, including Greenhouse Capital, have participated in the bridge round. New investors include Uncovered Fund, LongCommerce, First Circle Capital, and Adii Pienaar, co-founder and former CEO of WooCommerce.
Adii Pienaar in expressing his confidence in CredPal said, “The growth of retail in emerging markets like Sub-Saharan Africa has been phenomenal, and with what CredPal is building where merchants can expand their payment options through consumer credit, I’m positive that the company will further drive e-Commerce enablement in Africa.”
The startup will use the injected funds to extend partnerships with merchants leveraging its recently deployed CredPal Pay, an omnichannel merchant suite that allows businesses of all sizes and categories seamlessly accept buy now, pay later.
CredPal Pay serves as a point-of-sale infrastructure that enables BNPL through various means; a credit payment link, checkout plugin, QR codes, and a transaction management system. This suite is redefining the point-of-sale experience for online and offline merchants as well as consumers.
The funding will also help CredPal in its partnership with Airtel. Both companies will work together to help consumers across Nigeria access buy now, pay later to own smartphones and broadband modems.
With over 85,000 active customers and over 4,000 onboarded merchants, CredPal leads the charge to bring consumer credit to African consumers in a market that’s severely starved of efficient and sustainable credit solutions
In addition to providing infrastructure that allows banks and other financial institutions to deliver consumer credit in real-time, CredPal offers its customers access to credit cards, which was launched in November 2020.