Klump, a buy now pay later (BNPL) startup based in Lagos, has raised a pre-seed funding round of $780,000 to help it launch its flagship “Pay with Klump” product with select partners, providing BNPL solutions to customers and businesses.
Klump was founded in 2021 by Celestine Omin and Olufunbi Falayi, who have developed on products like Konga, DealDay, Paystack, Andela, Amazon, and H-E-B. Klump offers users to buy and receive their purchases right away, with payments spread out over four equal installments.
Klump can make an informed credit decision on a consumer in less than three minutes using its proprietary credit eligibility and fraud detection engine, with the goal of reducing the decision time to less than a minute.
The US$780,000 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, including Olugbenga “GB” Agboola, CEO of Flutterwave; Will Neale, founder of Grabyo; Michael Pennington, founder of Gumtree; Richmond Bassey, CEO of Bamboo; Babs Ogundeyi, CEO of Kuda Bank; Abdul Hassan, CEO of Mono; Opeyemi Awoyemi; and Selma Ribica.
The funds will be used to improve Klump’s credit decision and checkout engine, as well as to expand the company’s personnel, grow merchant partnerships, and provide clients with affordable financing options.
“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 installments,” Omin said.
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.
Felix Martinez, 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 technology educational institution, to provide laptop financing to its students, as well as Betastore, a B2B retail platform, to provide inventory financing to its retail customers.
