Happy Pay raises $5M to build an ad-funded payments network that charges consumers nothing

Happy Pay, the Cape Town-based buy-now-pay-later startup, has closed a $5 million seed round led by global technology investor Partech, marking one of the early-stage fintech investments in South Africa so far this year. 

The raise comes roughly two years after Happy Pay’s $1.8 million pre-seed round and sets the stage for the company to scale what it calls an “ad-subsidized payments network”. A model that inverts the traditional logic of consumer credit by shifting the cost of installment payments from shoppers to the merchants and brands that benefit from resulting sales.

The round drew participation from Futuregrowth Asset Management, 4Di Capital, E4E Africa, Equitable Ventures, Summit Deals, the University Technology Fund, and Felix Strategic Investments.

Most BNPL services, such as   Klarna, Afterpay, and Payflex, make money through late fees, merchant commissions, or interest. Happy Pay earns revenue through merchants who pay to advertise their products to shoppers already on the platform and ready to buy.

Shoppers split their purchases between two paycheques — 50% in month one and 50% in month two. No deposit, no interest. The AI matches users to products based on their behaviour and spending data, then surfaces those products at checkout with installments already applied. Merchants only pay when a sale goes through, not per click or impression.

“Our mission is simple — to make cash-flow management free for consumers. 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.”— Wesley Billett, Co-Founder & CEO, Happy Pay

The company says this has grown average basket sizes by 190% for merchants on the platform.

“We’ve looked at most BNPL companies across Africa, Europe and the US, and we’re clear that the best model for creating true value is the one Happy Pay has built” — Matthieu Marchand, Principal, Partech

South Africa’s BNPL market is projected to reach $1.07 billion and grow at 10.6% per year through 2029, eventually hitting $1.78 billion. The average credit-active South African spends about 28% of their take-home pay on debt repayments. That is the gap Happy Pay is targeting.

Credit in South Africa is expensive. Interest rates are high, and many people have limited access to formal lending. BNPL with no interest gives people a way to spread spending without taking on long-term debt.

Since launching in 2023, Happy Pay has reached over 600,000 users, which is 900% growth, mostly among younger consumers. Its local competitors include PayJustNow, Payflex, and Float. Happy Pay is trying to sit between advertising, payments, and retail as one connected system.

The funding goes toward more merchant partnerships, wider distribution, and the expansion of the AI recommendations and ads engine. In partnership with Mastercard, Happy Pay is also developing a zero-interest virtual card that works in physical stores and online.

The question is whether ad revenue from merchants can consistently cover the cost of interest-free installments at scale. The data Happy Pay holds is valuable to advertisers. If that turns into a reliable business, the model works. If it does not, the gap has to come from somewhere.

“Finance has previously been monetised through the consumer. We’re proving it can be monetized through value creation. When merchants grow, consumers shouldn’t have to go into debt to make that happen.”— Wesley Billett, Co-Founder & CEO, Happy Pay

Last updated: March 23, 2026