Klump wanted to make taking a loan feel as quick as buying a pair of shoes online. Five years later, the Nigerian buy-now-pay-later (BNPL) startup is shutting down after discovering that fast credit still needs one expensive ingredient: money to lend.

What happened? Klump, founded in 2021 by Celestine Omin and Olufunbi Falayi, has closed after raising about $1.2 million across two rounds. The startup let shoppers split purchases into instalments at checkout and eventually powered financing for hundreds of merchants, including Jumia, Konga, SLOT, and iStore. Seedcamp, the UK-based investor, led its $780,000 pre-seed round in 2022.

Explain like I’m new here: Klump initially funded loans from its own books. Owning the loan book meant it could decide who qualified and return a credit decision in minutes, exactly what an online checkout needed.

But lending at scale requires far more capital than building software, Omin wrote on October 25. Klump tried to raise debt to fund more loans but could not secure enough.

So it changed the model. Instead of lending, Klump became the pipe connecting shoppers and merchants to banks and other lenders. By July, shoppers on e-commerce platform Jumia could choose financing from multiple lenders directly at checkout.

Between the lines: The pivot solved one problem and created another. Klump no longer needed to finance every purchase, but its growth now depended on banks. Integrations took six to 18 months, sometimes years. Lenders decided which sectors they would finance, how much they would lend, and how much risk they would tolerate.

Klump’s problem captures BNPL’s difficult economics. Finance the loans yourself, and you need a deep pool of debt. Let banks fund them and your product moves at bank speed.

Zoom out: Klump explored acquisition options before shutting down, including talks with Kenya’s Lipa Later, which itself entered administration in 2025. Its founders now say BNPL may work better as a feature inside a larger financial services company than as a standalone business.

Klump proved people wanted instalments at checkout. It could not build enough control over the capital behind them.