We’ve been observing for a while that the buy now, pay later space is getting more competitive and more controversial. And as this happens, new entrants in the field are tending more toward vertical and B2B plays.
More evidence of this trend arrived this week in the form of a $1.7 million seed funding round for a London-based company called Playter. We can only assume the name is a contraction of “pay” and “later.” No less clever than any of these names.
The seed round was led by Fin Capital and 1818 Ventures, with participation from RLC Ventures, plus angel investors. The company has raised $3.4 million since its 2018 founding, according to Crunchbase. While the company has been around for a few years, its product launched just last year.
Playter focuses on the small business market. The company pledges to help SMBs stretch out cash flow by paying for professional services invoices in installments.
The company’s model is to offer small businesses access to up to £300,000 (about US$400,000), charging zero interest or revenue sharing. Playter then charges a subscription fee starting at £550 per month.
“Accessing funds for businesses can be a painful, complex, and time-consuming experience, but we’re here to fix that,” said Playter Founder & CEO Jamie Beaumont in a blog post. “Our subscriptions offer clients access to easy, fast and affordable funding to spread their services into manageable payments. We’re helping businesses increase their liquidity and stretch their cash flow further and for longer.”
A Growing Segment
We’ve seen other startups slide into this space in recent months. And it makes sense, given that cash flow is often the biggest challenge small businesses face. And BNPL was built to stretch out cash flow. Playter is just the most recent example of a vertical and/or B2B buy now, pay later startup.
We’ve covered a few of these here, including BlueTape, which offers a BNPL option for purchasing building supplies.
Also, many of the biggest names in consumer BNPL have also invested in B2B solutions. It’s interesting that they’ve chosen this path over adapting their consumer brands to B2B.
For example, Affirm spun out a company called Resolve from its venture studio. Resolve applies the BNPL model to help small businesses get paid faster. Resolve raised $60 million back in May 2021.
And Sweden’s Klarna has invested in a German company called Billie that also offers a B2B BNPL model. Billie closed a $100 million Series C round in October 2021.
Our sense is that B2B BNPL will become a feature of most fintech companies serving the SMB market. And one of Playter’s new investors seems to agree.
“We are excited about the new generation of B2B embedded BNPL FinTechs in the wake of the success of Klarna, Affirm, and Block/Afterpay,” said Henry Cashin, Fin Capital’s Head of Europe.
“We are bullish on what the team at Playter is building and the great early traction they are seeing. B2B embedded BNPL is the next big wave in this space and we look forward to supporting Jamie and the team as they scale.”
