FlexPay Applied sciences is a Kenyan fintech out to allow shoppers to afford merchandise that will have in any other case been out of attain for them.
The startup permits clients to buy at associate retailers, reserve merchandise and pay over a time period, at no added price. It initially partnered with a Kenyan retailer throughout launch however scaled in 2020, and has to this point grown its service provider community to 600. This variety of associate retailers is about to develop additional because the startup, which is a part of the 2023 Startup Battlefield 200 cohort, widens its “save now, purchase later” choices.
“We would like FlexPay to be like an lively checking account in that when a shopper will not be paying for retail merchandise, they’re saving and paying towards a trip, and even faculty charges,” mentioned FlexPay co-founder and CEO Richard Muchomba, including that the startup is within the strategy of sealing partnerships that can permit its customers to ebook and pay for flight tickets and accommodations.
That is a part of its continued technique to retain clients and follows the introduction of its preliminary product dubbed FlexPay Targets, for customers with set financial savings ambitions; FlexPay Chama, which permits teams to avoid wasting collectively; and Mama Prime, for maternity care financial savings.
Its clients join via the app or its associate retailers (together with offline ones) to start making funds. Internet buyers entry FlexPay as a fee choice throughout checkout.
“Offline retailers register clients by way of USSD, and in a approach, store house owners have turn out to be our brokers,” mentioned Muchomba, who co-founded the startup with Johnson Gituma (COO).
Prospects make an preliminary deposit via FlexPay and pay the rest over a predetermined interval.
“We don’t set the variety of installments or particular quantities clients ought to make, however within the retail business, most retailers permit funds inside three months. Fee time adjustments relying on the business; for the journey business, it may be as much as one yr,” he mentioned, including that its success price is 96%.
FlexPay will get a 5% fee for each services or products bought via its platform. It claims to have served over 200,000 clients to this point, a quantity that’s set to develop after its incoming launches in Uganda and Nigeria.
FlexPay’s “save now, purchase later” mannequin is in contrast to the credit-driven purchase now, pay later (BNPL) mannequin that prices curiosity and requires clients to have a very good credit score rating to qualify.
“The explanation individuals are shopping for merchandise utilizing FlexPay is as a result of this mannequin has historically been there. We simply digitized it. Individuals can’t afford to purchase high-ticket gadgets at one off and we predict the pay later mannequin is a greater technique for the African market,” mentioned Muchomba.
“Behind the scenes, we’re gathering the info we plan to make use of in constructing financing merchandise which are reasonably priced and sustainable.”
FlexPay has to this point raised $785,000, backed by a lot of buyers, together with the Acacia Group (previously the Cairo Angels Syndicate Fund), LoftyInc, Professional Dojo, Google Black Founders Fund, and Renew Capital.