Afridigest Week in Review: BNPL's beachhead
+Digitizing informal retail +Copying and pasting without context +Startup of the week +Thinking exponentially +Disposable income +Fintech is not enough +Podcasts (54gene, Amitruck, Medsaf) +more
The Afridigest Week in Review is a must-read weekly recap for Africa-focused founders, executives, and investors, as well as interested observers.
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Week 35 2021
📰 Deal of the weekGLOBAL BNPL PLAYERS TARGET AFRICA
Payflex, a South African buy-now-pay-later (BNPL) provider, was acquired by Australia’s Zip for an undisclosed amount.
The first and largest BNPL player in South Africa (according to the company), Payflex has grown from a base of 70 merchants in 2019 to over 1K active merchants today; it’s served over 135K customers to date, up from a customer base of 25K just a year ago.
💡 Why it’s the deal of the week: While Klarna and other major global BNPL providers expand their presence in the West, Zip is taking advantage of their limited presence in African markets.
BNPL solutions have been gaining momentum globally for a while now, accentuated by Square’s $29B purchase of Afterpay one month ago. And as BNPL and alternative credit options continue to become widespread, major global players have two main avenues for growth: expansion into other sectors beyond traditional retail and expansion into untapped global markets with large appetites for credit.
⛏️ Go deeper:
The Zip playbook: This acquisition reflects Zip’s traditional modus operandi — expansion to new markets via acquisitions rather than directly. In May, for example, Zip acquired UAE’s Spotii and the Czech Republic’s Twisto.
Harbinger of what’s to come: Payflex/Zip South Africa could be the beachhead for pan-African expansion to markets like Nigeria and/or Egypt.
Other players in Africa’s BNPL space: Carbon, Shahry, M-Kopa, CredPal, CDCare, Pavelon