South African fintech innovator Happy Pay has successfully raised R32 million (approximately $1.8 million) in a pre-seed funding round, setting the stage for an ambitious expansion of its Buy Now, Pay Later (BNPL) services. The investment was spearheaded by E4E Africa and 4Di Capital, and saw contributions from a consortium of investors, including DotExe Ventures, Launch Africa, Equitable Ventures, Felix Strategic Investment, Gaingels, and a number of local angel investors.
Launched in 2023, Happy Pay has quickly distinguished itself by offering its customers interest-free and deposit-free credit options. At the core of Happy Pay’s service is an AI-powered credit scoring system that swiftly evaluates customer affordability, facilitating a frictionless transaction process for both buyers and retailers.
Armed with the fresh capital, Happy Pay is poised to introduce groundbreaking products, amplify its marketing initiatives, and broaden its network of participating merchants. In line with its growth trajectory, the company is also looking to strategically bolster its team to support its burgeoning operations.
Wesley Billett, the co-founder and CEO of Happy Pay, expressed that the new funding is a catalyst for accelerated growth and the enhancement of their product suite, with the goal of delivering increased value to their consumer and merchant base.
Over the past year, Happy Pay has seen a meteoric rise in user engagement, boasting a 900% surge in user numbers, predominantly among the millennial and Gen Z demographics. The startup has been instrumental in propelling the growth of South African eCommerce businesses by unlocking access to new customer segments, elevating average order values, and optimizing conversion rates.
Patrick Postrehovsky, Co-Founder and COO of Happy Pay, emphasized the company’s role in offering consumers a cost-free alternative to high-interest credit options. This approach empowers customers to tap into the formal financial system by leveraging their own affordability metrics.
The BNPL sector in South Africa is on an upward trajectory, driven by a substantial segment of the population that remains financially underserved, burgeoning eCommerce trends, and the prevailing economic headwinds. Projections indicate that BNPL transactions in South Africa are set to hit $1.07 billion within the year, with an expected annual growth rate of 10.6% from 2024 to 2029, highlighting the potential for significant market development.
