Seedcamp, a London-based investment firm, which has invested in companies like UiPath, Wise and Revolut, led the funding round, with participation from MAGIC Fund, Voltron Capital, Yellowwood, Kickoff Africa, Hoaq Capital, Kesho VC, Assembly Investors. Several angel investors and founders including Olugbenga “GB” Agboola, CEO of Flutterwave, Will Neale, Founder of Grabyo, Michael Pennington, Founder of Gumtree, Founders of Helium Health, Richmond Bassey, CEO of Bamboo, Babs Ogundeyi, CEO of Kuda Bank, Mono CEO Abdul Hassan, Opeyemi Awoyemi and Selma Ribica also participated in the round.
In Africa, many consumers do not have easy or affordable access to credit to make purchases when they need it (at the time of purchase). With significantly low credit card penetration on the continent, a significant opportunity exists to serve this young and dynamic population. In Nigeria, for example, only around 3% of the population owns a credit card, one of the lowest credit card usages in the world.
Klump, founded in 2021 by Celestine Omin and Olufunbi Falayi, who combined their experience building products with Konga, DealDay, Paystack, Andela, Amazon and HEB, is launching its end-to-end BNPL product in partnership with WhoGoHost and Gigalayer, which together are the largest domain, hosting and cloud service providers in Nigeria.
Klump offers customers the option to buy and receive their purchases immediately and to split payments into four (4) equal installments. The first payment is made at the time of payment, and the remainder can be spread over three (3) months with a small interest rate applied to the balance. Klump pays merchants in full within 1 business day.
As BNPL adoption continues to grow globally, Klump’s vision is to become the preferred alternative online payment and in-store payment processing company, providing flexible payment solutions to customers and merchants. for products and services. With its proprietary credit eligibility and fraud detection engine, Klump is able to make an informed credit decision on a customer in less than 3 minutes, compared to the industry standard in Nigeria, which is two to three days, with the aim of further reducing the decision time to less than one minute.
Klump has also partnered with AltSchool, an alternative technology academic institution, to provide laptop financing to its students, as well as Betastore, a B2B retail platform, to provide inventory financing to its retail customers. Klump is rolling out other large-scale partnerships over the coming weeks, initially focusing on markets with higher-margin discretionary spending categories, such as apparel and footwear, fitness, accessories and beauty. Klump will also focus on the education, travel and healthcare verticals.
In Nigeria, the e-commerce market was estimated at $19 billion in 2020 and is expected to reach $45 billion by 2024. The in-store market was estimated at $268 billion in 2020 and is expected to reach $311 billion by 2024. by 2024. BNPL currently represents a small fraction of payment methods (eCommerce payment 2%, point of sale 6%).
Celestine Omin, CEO of Klump, said: “Our BNPL offering is a natural next step in the development of Africa’s e-commerce sector, and we intend to be at the forefront in developing the ability to take credit decisions on customers in real time. time and offer flexible payments to help ease the one-time payment economic pressure that has increased astronomically since the emergence of COVID-19. At the same time, we want to help merchants achieve business prosperity by providing the tools to offer their customers the ability to pay in small installments. »
Olufunbi Falayi, co-founder and chief product officer of Klump, added, “With our end-to-end BNPL product, we can quickly make an informed decision on credit eligibility, facilitate transactions with approved customers, make payments to merchants and efficiently manage collections from customers thanks to a flexible and efficient collection system. We maintain mechanisms in place to ensure that we promote responsible lending and reduce the risk of customers taking out loans they cannot repay.”
According to Felix Martinez, Investor at Seedcamp, “We are delighted to support Celestine and Olufunbi as they pioneer the democratization of new payment methods in a hugely underserved African market. It was clear to us from our first meeting that their respective experiences in scaling some of Africa’s most successful startups and implementing best-in-class payment solutions for large commerce merchants electronics make them the ideal team to become the responsible leader of the BNPL category on the continent. .”
This capital injection was intended to further develop Klump’s credit decision and payment engine, build the team, develop merchant partnerships and provide affordable financing to its customers.