Kenyan credit startup Lipa Later raises Ksh1.36B to expand to new African markets

The Buy Now Pay Later (BNPL) service partners with retailers to allow shoppers to pay in instalments and operates in Kenya, Uganda and Rwanda.

“We are excited to be working with our investors as we look to grow and expand to more markets in Africa,” Lipa Later co-founder and CEO Eric Muli told TechCrunch on Thursday.

“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,” he said.

Lipa Later said the capital would enable it to enter Tanzania, Ghana and Nigeria.

Cauris Finance, Lateral Frontiers VC, GreenHouse Capital, SOSV IV LLC, Sayani Investments and Axian Financial Services participated in the equity and debt funding.

Founded in 2018, Lipa Later has partnered with retailers such as French retailer Carrefour, allowing customers to pay for items including furniture, electronics and groceries in monthly installments.

To use the service, a customer signs up on the Lipa Later website after which they receive your credit limit according to how much they qualify for.

“​​During sign up, you will be asked to input your KYC including name, ID, employment status, as well as income and expenses information,” Lipa Later says on its website.

For Carrefour, customers pay a monthly interest rate of about 2.3% on the credit given and can spread the repayment over 3, 6, 9 or 12 months.

“The customer will have up to 30 days to make their first payment but are able to take the item home there and then,” says the company.

Lipa Later was also among five startups that received an undisclosed investment by Uncovered Fund, a Tokyo-based venture capital firm targeting early and seed-stage startups in Africa.