Most buy-now-pay-later companies make their money from consumers through interest, late fees, or revolving balances. Cape Town-based startup Happy Pay is betting that the model is broken, and investors are starting to agree.
Happy Pay has raised a $5 million seed round to scale what it describes as Africa’s first ad-supported payments network. The round was led by global technology investor Partech, with participation from Futuregrowth Asset Management, 4Di Capital, E4E Africa, Equitable Ventures, Summit Deals, the University Technology Fund, and Felix Strategic Investments.
The Model That Shifts the Bill to Merchants
Happy Pay says it is building an ad-subsidised payments network that removes interest and fees from BNPL transactions entirely, shifting costs to merchants and brands instead. The company generates revenue when retailers pay for access to customers and flexible payment options that drive higher conversion rates and larger basket sizes.
Central to the approach is an AI-driven advertising and distribution engine that matches merchants with high-intent shoppers in real time, drawing on behavioural signals, transaction data, affordability insights, and contextual cues to surface offers inside Happy Pay’s app and across partner channels, moving consumers from discovery through to checkout with instalment payments already built in.
“Our mission is to make cash-flow management free for consumers,” said Wesley Billett, co-founder and CEO. “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.”
Growing Into a Crowded but Expanding Market
Happy Pay has amassed more than 600,000 registered users since its founding and positions its model as a broader commerce platform that combines payments, advertising, and financing, rather than a standalone BNPL product bolted onto checkout.
The timing aligns with a notable shift in South Africa’s credit landscape. Transaction values in the country’s BNPL sector reached an estimated $815 million in 2025, up from roughly $717 million in 2024, as rising living costs push more consumers toward BNPL as a cash-flow management tool for both essentials and discretionary spending.
But the sector is not without risk. TransUnion reports that while more South Africans are using BNPL, the number of consumers unable to meet their payment obligations doubled between 2024 and 2025. It is precisely this debt trap that Happy Pay says its interest-free model is designed to avoid.
Why Partech Backed the Round
The BNPL sector has faced significant global scrutiny in recent years, with investors closely examining unit economics, default rates, and tightening regulations. Partech’s decision to lead this round signals a degree of conviction in the alternative approach Happy Pay has built.
“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,” said Matthieu Marchand, Principal at Partech. “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.”
What the Funding Will Be Used For
The fresh capital will go toward expanding merchant partnerships, growing the payment network’s presence across both e-commerce and physical point-of-sale systems, and building out its AI-driven recommendations and ads engine, alongside upgrades to risk and fraud detection infrastructure as the platform scales toward a target of millions of users.
This seed round builds on the company’s earlier $1.8 million pre-seed raise and signals that the ad-subsidised BNPL model is attracting serious capital. Whether it can hold up as Happy Pay pushes deeper into a market where consumer credit stress is rising will be the real test of the thesis.
