Nigeria’s CredPal, a Buy Now Pay Later (BNPL) pushing to secure a share in emerging market, has announced that it has secured $15 million in equity and debt in a recent bridge funding round to scale its consumer credit offerings across Africa.
The debt was provided by some unnamed financial institutions while the equity was provided by an existing investor, Greenhouse Capital and new investors including Uncovered Fund, LongCommerce, First Circle Capital, and Adii Pienaar, co-founder and former CEO of WooCommerce.
This is coming two years after the startup raised $1.5 million from Y Combinator, Greenhouse Capital and other VCs.
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Founded by CEO Fehintolu Olaogun and Olorunfemi Jegede, CredPal is a revolutionary credit solution geared towards providing seamless credit access for businesses and individuals, with focus on developing economies.
CredPal is one of those companies that intends to ride on the BNPL wave which has risen to unprecedented heights in recent times. A recent report supports this trend projecting that BNPL Payments are expected to grow by 59.3% and BNPL payment adoption is expected to grow steadily over the forecast period, recording a CAGR of 20.4% during 2021-2028
Credpal says that part of the investment is for expansion into other African markets, mainly Kenya, Egypt, Ghana and Cameroon. It also intends to secure a partnership with Airtel Nigeria to allow customers to purchase smartphones and pay in installments.
CredPal currently provides consumer credit services via two options – a credit card and an app. Consumers can access credit from N5,000 (~$10.00) to N500,000 (~$1,000.00) and they are to repay between a 30-day to a 180-day period after making a down payment of 30%. Interest rates range from 4% to 9%.
CredPal claims it currently has 20,000 merchant sign ups; but it has only onboarded over 4,000 for now. Monthly active merchants is only 600 while monthly active customer base is 85,000.
Olorunfemi Jegede believes that in the face of rising competition, CredPal differentiates itself from the pack by providing an omnichannel approach to BNPL.
“We’ve built out a merchant suite to cater to those who have like full-fledged e-commerce websites to those with brick and mortar stores and social commerce merchants. We are merchants agnostic and also our tech allows consumers to be able to interface with CredPal across a wide range of channels,” he says.
Other competitors include Carbon Zero, PayLater, Lipa Later and even more recently ThankU Cash which recently got $5.3 million to partly invest in BNPL service.