The South African fintech has just raised $1.8 million in pre-seed funding, backed by notable investors like E4E Africa and 4Di Capital.

Happy Pay, a South African fintech firm that offers Buy Now, Pay Later (BNPL) with 150,000 active users, announced today that it has raised $1.8 million in pre-seed capital.

The pre-seed financing will be used to introduce various innovative products, increase marketing efforts, and expand Happy Pay's merchant base, according to a company statement. 

The company also stated that it intends to strategically expand its personnel while focusing on efficient expansion. 

 A group of major South African venture capital investors, including co-lead investors E4E Africa and 4Di Capital, led the investment round, which also included DotExe Ventures, Launch Africa, Equitable Ventures, Felix Strategic Investment, Gaingels of the United States, and local angels. In addition, Fin Africa (previously Finclusion Group) is providing Happy Pay's capital. 

The Happy Pay platform uses the most recent advancements in autonomous AI-driven credit scoring to determine customer affordability in seconds, cutting costs and inefficiencies while providing a frictionless checkout experience for both customers and businesses. 

Happy Pay, which launched in 2023, claims to have witnessed significant development over the last year, with a 900% increase in user growth.

According to the company, the platform's rise in interest and growth is being driven mostly by millennials and Generation Zs who prefer BNPL choices over traditional credit cards. 

 The fintech said: “This preference stems from their desire for transparency, convenience, and an aversion to long-term debt, with the BNPL model resonating with their financial habits.”

Wesley Billett, co-founder and CEO at Happy Pay, commented: "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."

Likewise, Patrick Postrehovsky, co-founder and COO at Happy Pay, added: “We have been enabling growth for South African merchants within the e-commerce sales channel by giving them access to new customers, bigger average basket sizes, and better conversion metrics—all while providing South African consumers with zero-cost alternatives to high-interest credit.

“Our focus on financial inclusion has allowed thin-file consumers to gain access to the formal financial ecosystem via their own affordability data.”

Bas Hochstenbach, partner at E4E Africa, stated: "We believe that Happy Pay's innovative approach to financial inclusion via their BNPL-led consumer payments platform can bring more South African consumers into the formal financial ecosystem and create access to more equitable finance options for them."

Anton van Vlaanderen, partner at 4Di Capital, echoed these sentiments: "“The Happy Pay team has consistently delivered strong growth since going live in the market and leveraged the power of AI and data to drive meaningful financial inclusion for South African consumers, along with tangible economic benefits for merchants.”

"We are pleased to provide this debt facility to Happy Pay and support its efforts to provide equitable financial solutions for South Africans,” added Timothy Nuy, CEO at Fin Africa.