Scalapay raises $155M at a $700M valuation as buy-now, pay-later

Scalpay, a buy-now, pay-later (BNPL) technology provider that has made significant progress with retailers and consumers in Europe and in categories like fashion, has closed a round of funding that it will use to expand its To fulfill the ambitions. The startup has raised $155 million at a $700 million valuation.

Tiger Global is leading the round, with new backers Balen Capital and Woodson Capital also participating, along with Fasanara Capital and Ithaca Investments, which backed Scalpay in their previous $48 million round earlier this year. did. (Scalapay has now raised $203 million in total.)

This is a huge round of funding considering Scalpay’s age: The company is only two years old and is a Series A. Ramping up like this underscores just how hot the BNPL market is right now, and also how the startup is faring. He.

The company’s service is based on being tightly integrated with the check-out process of online retailers and offering users interest-free, three- installments to pay for anything they purchase. It now works with 3,000 merchants in Europe – specifically Italy, France, Germany, Spain, Portugal, Finland, Belgium, the Netherlands and Austria – and has yet to reach huge markets such as the US and UK.

“When we launched, we saw 5% to 10% of all transactions for our customers happen through Scalpay,” CEO Simone Mancini, who co-founded the company with Johnny Mitrevsky, said in an interview. “Now we are at 15%-20% and it is rising. In luxury fashion we are accounting for 30%-50% of all transactions and in some cases more than half. We want to be something that makes shopping enjoyable again.”

Pleasant, more likely: While shopping cart abandonment remains an issue for all online retailers, Scalpay claims that its existence has increased conversions by 11%, and gives consumers the confidence to spend more. Usually 48% more per buyer.

The growth of buy-now, pay-later services has been a major hallmark of the pandemic-era e-commerce market. Although the option of paying for items in installments was around in the years before Covid-19 – in fact, take-aways and other delayed payment services were big even before e-commerce – the use of BNPLs gained a new boost of attention. saw. Way more people are using online channels to shop, and – given the uncertainties of the economy – more of them need some financial support to make purchases eventually.

This was also complemented by a new and more sophisticated approach: leading BNPL providers are bringing together a more ambitious big-data play, leveraging comprehensive risk analysis and a more creative and complete picture of an individual and his or her finances. . To better understand what to expect from any transaction. Algorithms and how they guide the course of transactions have become as important as the accessibility of the services themselves.

Due to all this, the crowd of big BNPL companies has become even bigger. Klarna, long viewed as the most valuable startup (in terms of paper valuation) in Europe, raised funds in June at a valuation of about $46 billion. Affirm went public at the beginning of the year and is currently valued at $23 billion. PayPal this week revamped its ambitions in the market with an Asian kicker: It acquired Pedi in Japan for nearly $3 billion. And of course Square has entered the space in a big way with its $29 billion acquisition of Afterpay in June.

And before you do consider the many small BNPL companies that have raised and are raising funds. They include Zilch, which is now valued at more than $500 million; and Resolve, a spinout from Affirm, which has raised $60 million.

In that context, Scalpay’s $700 million valuation seems modest — maybe even a bit like a bargain? You might not be surprised that this latest fundraising happened on the heels of startups actually being approached for acquisitions, by not one but two different companies that were interested in the technology, but it was. also the fact that Scalpay had made significant strides in a specific market – geographically, in Europe; And also in terms of product categories, especially fashion – where they are willing to grow.

Mancini declined to say which companies were the largest in the lot, other than the note. (Just my guess, but maybe the acquisition speed of some of the bigger players gives a clue as to who it might be?) In any case, Scallope said no, but chatter is leading to other things, and That’s how Tiger Global came into the picture.

Large investor pockets could prove to be an important part of any of these companies going forward: building relationships and expanding your pool of talent will be key to growing, both in areas where the right contacts and the need to meet new demands. Having the right resources will come in handy.

“Scalapay has rapidly become a key player in the European payments and BNPL sector,” said Alex Cook, partner at Tiger Global, in a statement. “We are impressed by their product development pipeline and strong focus on merchant success. We are excited to support Scalpay in its next phase of growth.”

Interestingly, the company said it plans to focus heavily on BNPL’s process improvement rather than diversifying into other areas like fintech (areas where Affirm and Klarna are doing a lot); Or a wider field of payments (an obvious move for Afterpay and Square).

“While the likes of Klarna and Afterpay have launched deposit accounts and forayed into the banking sector, Scalpay’s exciting roadmap is focused on helping merchants with new customer experiences that drive conversions. They are in entirely new ways. We are taking advantage of BNPL from the U.S.,” said Francesco Filia, CEO of Fasanara Capital.

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