BNPL Startup and Klump Close $780k Pre-seed Financing

Klump, a Nigerian Buy Now Pay Later startup, has closed a $780k pre-seed round to launch its flagship Pay with Klump™ product with select partners offering BNPL solutions to customers and businesses.

Seedcamp led the round with participation from MAGIC Fund and Voltron Capital as well as Yellowwood, Kickoff Africa. Kesho VC and 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, Abdul Hassan, CEO of Mono, Opeyemi Awoyemi, and Selma Ribica also participated in the round.

The funds will further develop Klump’s credit decision and checkout engine, develop merchant partnerships, build the team, and offer affordable financing to its customers.

African consumers often have difficulty getting affordable credit to purchase what they need when they want it. For instance, only about 3% of Nigeria’s entire population for example own a credit card which represents a low utilisation in comparison to other countries of the world.

The first payment is made at checkout. After that, the rest can be spread over three month with a low interest rate. Merchants on our platform get paid in full the day they open.

Klump will announce other large-scale partnerships within the next few days. The focus will be on high-margin, discretionary spend categories such as apparel and footwear, beauty, and accessories.  Also, the healthcare, education and travel industry verticals will be under scrutiny.

The CEO of Klump, Celestine Omin, said, “our BNPL offering is a natural next step in the development of the African e-commerce sector, and we intend to be at the forefront by developing the capability to make credit decisions on customers in real-time and offer flexible payments to help reduce the economic pressure of one-time payment which has grown astronomically since the emergence of COVID-19. At the same time, we want to help merchants achieve commercial prosperity by providing the tools to offer their customers the option to pay in small installments.”

In addition, Olufunbi Falayi, Co-founder and Chief Product Officer of Klump, added, “with our end-to-end BNPL product, we can quickly make a sound credit eligibility decision, facilitate transactions to approved customers, make disbursements to merchants, and effectively drive collections from customers with a flexible and efficient collections system. We are keeping mechanisms in place to ensure we promote responsible lending and reduce the risk of customers taking loans they cannot pay back”.

Speaking about the fundraise, Felix Martinez, an investor at Seedcamp said, “we’re thrilled to be backing Celestine and Olufunbi as they lay the backbone in democratizing new payment methods across a hugely under-served African market. It was clear to us from our first meeting that their respective experiences scaling some of Africa’s largest startup successes and implementing best-in-class payment solutions for large e-commerce merchants make them the perfect team to become the responsible BNPL category leader on the continent.”

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