- The round was led by Seedcamp, a London-based investment firm, which has invested in companies like UiPath, Wise, and Revolut.
- Several angel investors and founders, including Olugbenga “GB” Agboola, CEO of Flutterwave, also participated in the round.
- Klump offers customers the option to buy and receive their purchases right away and spread the payments over four (4) equal instalments.
Klump, a Lagos-based Buy Now Pay Later payment platform, announced the close of its $780k pre-seed round, infusing it with enough funds to launch its flagship Pay with KlumpTM product with select partners, offering BNPL solutions to customers and businesses.
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, Abdul Hassan, CEO of Mono, 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 buying time). With a markedly low credit card penetration across the continent, a significant opportunity exists to serve this young and vibrant population. In Nigeria, for example, only around 3% of the population own a credit card, one of the lowest credit card utilization in the world.
Klump, founded in 2021 by Celestine Omin and Olufunbi Falayi, who have combined experience building products with Konga, DealDay, Paystack, Andela, Amazon and H-E-B, is launching their end-to-end BNPL product in partnership with WhoGoHost and Gigalayer, who together are the biggest providers of a domain, hosting and cloud services in Nigeria.
Klump offers customers the option to buy and receive their purchases right away and spread the payments over four (4) equal installments. The first payment is made at the point of checkout, and the remainder can be spread out over three (3) months with a small interest rate applied to the balance. Klump pays the merchants in full in 1 business day.
As the adoption of BNPL continues to grow globally, Klump’s vision is to become the preferred alternative online checkout and in-store payment processing company, offering flexible payment solutions to customers and merchants for products and services. With their 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 norm in Nigeria, which stands at two to three days, with a goal to further reduce the decision time to less than a minute.
Klump has also partnered with AltSchool, an alternative tech academic institution, to provide laptop financing to its students, as well as with Betastore, a B2B retail platform, to provide inventory financing to its retail customers. Klump is rolling out other large-scale partnerships over the next few weeks with an initial focus on marketplaces with higher-margin, discretionary-spend categories, such as apparel and footwear, fitness, accessories, and beauty. Klump will also focus on the education, travel and healthcare industry verticals.
In Nigeria, the eCommerce market was estimated at $19 billion in 2020 and projected to grow to $45 billion by 2024. The in-store market was estimated at $268 billion in 2020 and projected to grow to $311 billion by 2024. BNPL currently represents a small fraction of payment methods (eCommerce checkout 2%, POS 6%).
Celestine Omin, CEO, Klump, 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.”
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”.
According to Felix Martinez, an investor at Seedcamp, “we’re thrilled to be backing Celestine and Olufunbi as they lay the backbone in democratising 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 makes them the perfect team to become the responsible BNPL category leader on the continent.”
This infusion of capital has been earmarked to further develop Klump’s credit decision and checkout engine, build the team, develop merchant partnerships, and offer affordable financing to its customers.
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