Nigerian BNPL Startup Klump Folds up After Five Years

By Adedapo Adesanya

Nigerian buy-now-pay-later (BNPL) startup, Klump, has shut down after five years of operations, citing difficulties securing lending capital, lengthy integration processes with financial institutions and restrictions on credit provision.

The company’s co-founders, Mr Celestine Omin and Mr Olufunbi Falayi, announced the closure in a farewell note, saying they had considered raising additional capital or selling the business before deciding to wind down operations.

“Today, with heavy hearts, we are announcing that Klump is shutting down. We are proud of what we built. Few things are as fulfilling as watching people use a product that once existed only in your imagination,” Mr Omin wrote in a blog post published on Sunday.

Founded in 2021, Klump developed technology that enabled customers to purchase goods and pay in instalments while allowing merchants to offer financing at checkout. Its flagship product, Pay with Klump, allowed shoppers to spread payments across four instalments.

The startup raised approximately $1.2 million through a seed funding round and an extension to support its operations and growth.

According to the founders, Klump initially operated its own loan book, giving it greater control over lending decisions, approval speed and the size of loans it could offer. However, efforts to secure debt financing to expand its lending operations were unsuccessful.

The company subsequently adopted a platform-based model that connected customers and merchants with financial institutions that provided credit, funded purchases and assumed the associated credit risks.

Its lending partners included First Bank, Credit Direct, Stanbic IBTC, Polaris Bank, Wema Bank, Fidelity Bank and RenMoney.

However, the founders said integrating with banks could take between six and 18 months, with some processes extending to nearly three years because of commercial and legal requirements.

Financial institutions also retained control over eligible sectors, loan sizes and lending risks, limiting Klump’s ability to scale its services.

The founders said they reassessed the business in early 2026, weighing further fundraising against a potential sale. Although they explored acquisition opportunities, discussions with prospective buyers did not produce an acceptable outcome.

Some interested fintech companies lacked the lending infrastructure needed to absorb the business, while other negotiations failed to result in a suitable transaction.

The company eventually received an offer but declined it without publicly disclosing its reasons.

Klump had reportedly attracted acquisition interest in the fourth quarter of 2023, but that process also collapsed after months of due diligence.

Despite the challenges, the startup continued pursuing commercial partnerships, including an agreement with Jumia to introduce instalment-payment options on the e-commerce platform.

In their farewell message, the founders expressed disappointment over the closure but said they were proud of building a product that customers eventually used, reflecting on the experience of turning their original idea into a functioning business.