London-based Divido, a white-label platform for retail finance that integrates with e-commerce platforms (but can also support omni-channel) so retailers can offer consumers a "buy now, pay later" option at the point of sale, has bagged a $30 million Series B to fund international expansion.
The funding round is led by global banks HSBC and ING, with participation from Sony Innovation Fund by IGV*, SBI Investment, OCS, Global Brain and DG Daiwa Ventures along with existing investors DN Capital, Dawn Capital, IQ Capital and Amex Ventures.
The Series B follows a $15 million Series A back in 2018 -- when the fintech product was available in a handful of European markets and the U.S., with a goal of launching in 10 more countries by the end of 2019.
Evidently, that anticipated rapid-fire international expansion didn't exactly pan out as planned, as Divido is only operating in 10 markets across two continents now -- a little less than two years later. But, flush with Series B funding, it says it's looking to fuel the pace of its international push.
The 2014-founded startup operates a marketplace model where lenders compete to offer the most suitable credit line to consumers to grease purchases -- partnering with businesses such as banks, retailers and payment partners so they can offer "buy now, pay later" to their users at the point of sale.
Divido claims its product leads to up to 20%-40% more sales for retailers -- and it says it has more than 1,000 clients and operators at this stage (a metric it was also reporting in September 2018).
Its pitch is that by partnering with multiple lenders it can offer higher acceptance rates and lower fees to consumers so they have greater choice to spread payment for larger purchases. It also means it doesn't need a banking licence itself, so can (in theory) scale faster into more markets.
Credit suitability is also assessed by the lenders on its platform, not by Divido itself.
The pandemic has clearly put pressure on many consumers' personal finances, which is likely to be driving more demand for alternative options to credit cards to spread purchase costs. Although the move toward diversifying "pay later" options long pre-dates COVID-19 -- via startups like Klarna and the scores that have sprung up in its wake.
Commenting on the Series B in a statement, Christer Holloman, founder and CEO, said: “The retail finance market is in a period of exponential growth, expected to hit $2.5 trillion next year. At Divido, we have created a global standard for banks, retailers and payment partners to connect seamlessly to offer ‘Buy Now Pay Later’ to consumers. It is hugely exciting to have this round led by global clients, which is testament to the strength of our product and the strategic impact we deliver.”
In another supporting statement, HSBC's Catherine Zhou, its global head of venture, digital innovation and partnerships, said: “There is clear demand for retail finance across the globe, both from customers and merchants. The Divido platform enables lenders to serve customers in this area with a compelling, well-managed proposition.”
While Jan Willem Nieuwenhuize, managing director of ING Ventures, added: “ING is focusing our innovation efforts around defined value spaces. Divido aligns with our lending value space and has a strong strategic fit with ING’s consumer finance business. This is an exciting and rapidly growing market that is constantly evolving and accelerating following Covid. We see Divido as an innovator at the very forefront of the market, so perfectly fits the profile for the dynamic, disruptive companies we choose to partner with.”