Fintech startup Scalapay secured $48 million in a seed round that included debt and convertible notes to roll out its “buy now, pay later” platform in Europe.
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“Johnny [Mitrevski] and I were working together in online marketplaces and witnessed the challenge of acquiring customers and increasing revenue,” Simone Mancini, co-founder and CEO, told Crunchbase News. “We decided to launch in Europe where buy now, pay later is underdeveloped.”
The company is headquartered in Ireland with offices in Paris, Monaco, Sydney and Milan.
Scalapay breaks up payments into three installments, offering zero interest, and assumes all risk by paying the seller in full and immediately. The average value of orders when customers pay with Scalapay is 49 percent greater, and the average increase in the number of paying customers is 26 percent greater, Mancini said.
Some 25 companies in the BNPL space have raised $1.7 billion in known venture capital funding since 2016, according to Crunchbase data. Affirm, which went public earlier this month, accounted for a vast majority of that funding, raising $1.5 billion alone.
In late December, a Bank of America survey predicted apps such as Afterpay, Affirm, Klarna and PayPal were poised to “grow 10-15 times by 2025 to eventually process between $650 billion and $1 trillion in transactions.”
Fang Li, managing partner at Baleen Capital, an early investor in Afterpay, said in an interview that the buy now, pay later market was created for smaller purchases, though it is often used now to break up large purchases.
He met Mancini and Mitrevski in 2019 and thought, from a team and product perspective, that what they were doing was “off the charts.”
“Customers think it is the most delightful experience and will use the shop directory to look for other stores to use Scalapay,” Li said. “It ultimately drives new purchases and new customers.”
The funding will be used to roll out Scalapay across Europe, including expanding in France. Aiding that rollout is a new partnership with Germany-based Raisin to enable retailers to offer buy now, pay later installment payments across Europe using a simple integration.
“We take a different approach and want to give merchants the tools they need to provide a magical experience for merchants,” Mancini said.
In addition, the company is bringing on new talent, about 50 new software engineers to build out its platform in the U.S., Australia and Europe.
Scalapay is already working with more than 1,000 merchants across France, Italy and Germany and has seen a 300 percent growth over the last quarter, Mitrevski said in an interview.
“Our next steps are really about the expansion,” he added. “Italy is a market leader for us, and we want to get those same results in France and Germany.”
Illustration: Li-Anne Dias
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