Investors Provide Funding Support to Promote Pay with Klump
By Adedapo Adesanya
To further establish the buy now pay later (BNPL) model in Nigeria, Lagos-based startup, Klump, has raised a $780,000 pre-seed funding round to help it launch its flagship product with select partners, offering BNPL solutions to customers and businesses.
The new product name Pay with Klump will use the company’s proprietary credit eligibility and fraud detection engine to make an informed credit decision on a customer in less than three minutes, with a goal to further reduce the decision time to less than a minute.
The pre-seed funding round was led by London-based investment firm Seedcamp, with participation from MAGIC Fund, Voltron Capital, Yellowwood, Kickoff Africa, Hoaq Capital, Kesho VC, Assembly Investors, as well as several angel investors and founders.
These big names include Mr Olugbenga ‘GB’ Agboola, CEO of Flutterwave; Will Neale, founder of Grabyo; Mr Michael Pennington, founder of Gumtree; Mr Richmond Bassey, CEO of Bamboo; Mr Babs Ogundeyi, CEO of Kuda Bank; Mr Abdul Hassan, CEO of Mono; Mr Opeyemi Awoyemi; and Ms Selma Ribica.
The funding will be used for further developing Klump’s credit decision and checkout engine, building the team, developing merchant partnerships, and offering affordable financing to its customers.
Speaking on this, the co-founder of the company Ms 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 instalments,” Ms Omin noted.
On his part, the co-founder, Mr Olufunbi Falayi said Klump can quickly make sound credit eligibility decisions, 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,” he said.
Mr Felix Martinez, an investor at Seedcamp, said he was thrilled to be backing Klump as it laid 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,” he said.
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 will also be 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.
Founded in 2021 by Ms Celestine Omin and Mr Olufunbi Falayi, who have combined experience building products with Konga, DealDay, Paystack, Andela, Amazon and H-E-B, Klump offers customers the option to buy and receive their purchases right away and spread the payments over four equal instalments.