The equity funding round was led by Greenhouse Capital with participation from new investors including Uncovered Fund, LongCommerce, First Circle Capital, and Adii Pienaar, co-founder and former CEO of WooCommerce.
The startup will use the investment to expand into other African markets, primarily Kenya, Egypt, Ghana, and Cameroon.
Part of the new investment will also go toward securing a relationship with telecom provider Airtel Nigeria to enable low to middle-income earners to buy smartphones in installments.
The platform offers loans for amounts ranging from N5,000 (US$10.00) to N500,000 (US$1,000.00), which must be repaid within 30 to 180 days after making a 30% down payment. The rate of interest varies between 4% and 9%.
Clients who pay off their debts before the two-month mark may avoid paying interest, which is paid by fees the firm acquires from merchants.
The start provides credit services to users when they visit a member establishment to shop for things ranging from electronics, especially smartphones, to furniture and foodstuffs, using one of two options: a credit card or a mobile app.
Currently, the startup boasts 20,000 merchant subscribers, but it has only onboarded over 4,000, with only 600 of them being monthly active merchants. They have an 85,000-strong monthly active consumer base.
The plan to expand its services coincides with the spread of buy-now-pay-later (BNPL) around the globe, and African shoppers are eager to participate.
Banks, fintech, financing businesses, payment service providers, and merchants are all trying to figure out how to obtain a piece of the pie.
Retailers are adopting BNPL for one simple reason: it increases sales and attracts new clients. BNPL offers larger baskets and lesser abandoned baskets for online businesses.
Customers prefer BNPL because it increases availability and accessibility or makes a larger number of purchases feasible at the same time, and there are no interest costs, unlike typical credit products.
Many BNPL products are accessible at the point of sale with few further procedures and may not need a standard credit check.