Digital consumer credit provider LipaLater has secured a Sh1.36 billion capital injection from a consortium of investors to finance expansion into new markets in Africa. The funds are in the form of a mix of debt and equity.
The firm, which was founded in Nairobi in 2018, offers hire purchase services to consumers by paying the retailer upfront and then collecting instalment payments from the buyer.
The firm said that the new capital will fund expansion in its existing markets of Kenya, Uganda and Rwanda, and also open new operations in Tanzania, Nigeria and Ghana.
Its latest fundraising effort was backed by Cauris Finance, Lateral Frontiers VC, GreenHouse Capital, SOSV IV LLC, Sayani Investments and Axian Financial Services.
“In the next 12 months we are looking to grow and double our presence in the existing markets, even as we open in three to five new markets in Africa,” said LipaLater co-founder and chief executive Eric Muli.
The company employs a digital-based credit scoring system that assigns credit limits to users on its app, allowing them to access goods at partnering merchants who include retail chain Carrefour, Apple, Tecno and Samsung.
It then earns interest on the credit just like a normal lender would.
The form said that electronic goods and mobile phones constitute the most popular items sold through its platform.
The company has also been looking to take advantage of the increasing preference by tech-savvy Kenyans to shop online, with its app also allowing merchants who operate on online platforms to sell on credit to buyers.
Hire purchase plans remain popular among Kenyans looking to buy relatively costly household and commercial goods, with major retail chains also allowing instalment payment plans
There are also specialised hire purchase companies operating in the country, such as Amedo Centre which specialises in sewing machines and major kitchen appliances, and the Kenya Credit Traders Limited which sells among other things home appliances, furniture, solar power systems, agriculture and commercial equipment.