South African fintech company Happy Pay has raised $1.8 million (R32 million) in pre-seed funding, it announced. Happy Pay specialises in buy-now-pay-later (BNPL) solutions.
The funding was secured from several notable venture capital investment firms, including co-lead investors E4E Africa and 4Di Capital, with participation from Launch Africa, Equitable Ventures, Felix Strategic Investment, and US-based Gaingels.
Happy Pay also announced that Fin Africa is providing Happy Pay’s debt facility.
“We’re excited to have the backing of such a remarkable group of investors,” said Wesley Billett, Co-Founder and CEO at Happy Pay.
“This funding will enable us to accelerate our growth and expand our innovative product offerings, ultimately providing more value to the customers and merchants that we serve.”
Buy now, pay later boom
Happy Pay states it is South Africa’s only independent BNPL provider, with its offerings designed to meet all regulatory standards while delivering an interest-free and deposit-free credit solution to its users.
In practical terms, this allows its users to shop online and make a purchase – and then pay for it “over two paycheques”.
“The platform leverages the latest advancements in autonomous AI-driven credit scoring to calculate customer affordability in seconds, reducing costs and inefficiencies while ensuring a frictionless checkout experience for consumers and merchants alike,” states Happy Pay.
As part of its pre-seed funding announcement, Happy Pay also revealed that it now has 150,000 active users on its BNPL platform.
“Launched in 2023, Happy Pay has experienced rapid growth over the past year, attracting a 900% increase in user growth,” said the company.
“The surge in interest and growth of the platform is largely driven by Millennials and Gen Zs who are favouring BNPL options over traditional credit cards.”
It added that part of its pre-seed funding will be used to expand Happy Pay’s merchant base.
“We have been enabling growth for South African merchants within the ecommerce sales channel by giving them access to new customers, bigger average basket sizes, and better conversion metrics,” said Patrick Postrehovsky, Co-Founder and COO at Happy Pay.
Happy Pay team.
Industry growth
The announcement from Happy Pay follows huge growth of the BNPL sector in recent years.
A Buy Now Pay Later report released in June estimates the global BNPL market will reach over $230 billion in value before the end of 2024. This is an increase of over 48% compared to 2023.
It predicts the BNPL sector will continue to grow rapidly up to 2028, where it is expected to reach a value of $1 trillion.
The growth of the BNPL industry has coincided with a huge increase in people shopping online through ecommerce stores, which allow for BNPL providers to integrate into their checkout processes.
