Happy Pay raises $5 million to build Ad-funded instalment payment network in South Africa

The Cape Town-based platform uses AI to match merchants with shoppers in real time, shifting the cost of instalments from consumers to the brands that benefit from the resulting sales

Happy Pay, a buy-now-pay-later platform based in Cape Town, has raised $5 million in seed funding led by Partech, a global technology investor. The round also included participation from Futuregrowth Asset Management, 4Di Capital, E4E Africa, Equitable Ventures, Summit Deals, the University Technology Fund and Felix Strategic Investments.

The company, which has more than 600,000 registered users, offers instalment payments without charging consumers interest or fees. Instead of passing costs to the buyer, Happy Pay's model shifts the expense to merchants and brands, who pay to reach shoppers likely to complete a purchase. The result is a payments network partially funded by advertising revenue.

At the centre of the platform is an AI-driven engine that analyses behavioural signals, transaction history, affordability data and contextual information to identify what a user is likely to buy and when. Relevant merchant offers are then surfaced inside the Happy Pay app and distributed across partner applications, digital channels and other touchpoints, connecting consumers to products with instalment payment options already embedded in the checkout flow.

"If we can connect the right product to the right person at the right moment and remove payment friction, commerce itself can fund the flexibility. That allows us to deliver instalment payments without charging consumers interest," said Wesley Billett, co-founder and CEO of Happy Pay.

The company frames its approach as a response to the cost of consumer credit in South Africa, where the average credit-active consumer spends around 28% of their net income on debt repayments. "We believe our model changes that equation by creating value for every participant. Merchants grow sales and acquire new customers, consumers gain access to cost-free cash-flow flexibility, and we build a business designed to deliver positive, long-term impact," Billett added.

Partech principal Matthieu Marchand said the firm evaluated buy-now-pay-later models across Africa, Europe and the United States before backing Happy Pay. "BNPL only makes sense when it delivers real affordability for consumers, while helping merchants improve conversion, grow their client base, build loyalty and reduce acquisition costs," he said.

The capital will be used to expand merchant partnerships, grow distribution across digital and physical channels, and continue developing the AI recommendations and advertising engine.