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.

The round was led by Seedcamp with participation of MAGIC Fund, Voltron Capital, Yellowwood, Kickoff Africa, Hoaq Capital, 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 typically struggle to access affordable credit to buy what they need at the time 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 the point of checkout, then the remainder can be spread over three months with a low-interest rate on the balance. Merchants on the platform are paid in full on the first day of business.

Klump will roll out other large-scale partnerships in the next few weeks with a focus on marketplaces with higher-margin, discretionary-spend categories, such as apparel and footwear, fitness, accessories, and beauty.  Focus will also be on the education, travel and healthcare industry verticals.

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 instalments.”

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 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.”

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