Nigerian startup Klump received $780k pre-seed funding to launch ‘Pay with Klump’
Klump, a buy now pay later (BNPL) startup located in Lagos, has acquired $780,000 in pre-seed capital to enable it to launch its flagship “Pay with Klump” product with a limited group of partners, providing BNPL solutions to customers and companies.
Klump was founded in 2021 by Celestine Omin and Olufunbi Falayi, who have worked on products like Konga, DealDay, Paystack, Andela, Amazon, and H-E-B. Klump allows users to buy and get their things immediately away, with payments spread out over four equal instalments. Klump can make an educated credit judgement on a consumer in less than three minutes using its patented credit eligibility and fraud detection engine, with the objective of reducing the decision time to less than a minute.
Seedcamp, a London-based investment firm, led the US $780,000 pre-seed funding round, which included 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. 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 relationships, and provide clients with inexpensive 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.
Klump, according to Falayi, can promptly make good credit eligibility judgments, enable transactions for authorised consumers, issue merchant payments, and efficiently drive customer collections using 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 payback,” he said.
Felix Martinez, a Seedcamp investor, said he was excited to fund Klump because it will help democratise new payment methods in a vastly underserved 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 teamed up 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 finance to its retail clients. Over the coming several weeks, Klump will launch more large-scale collaborations, with an initial focus on marketplaces with higher-margin, discretionary-spend categories including clothes and footwear, fitness, accessories, and cosmetics. Klump will also concentrate on the verticals of education, tourism, and healthcare.
