OK, yet another BNPL platform has raised a pile of money. This time, the winner is ChargeAfter. The California company with offices in New York and Tel Aviv has just raised a $44 million B round.
This round was led by The Phoenix. Also participating were Citi Ventures (Citigroup), Banco Bradesco, MUFG (Mitsubishi UFJ Financial Group), and existing investors. This brings ChargeAfter’s lifetime funding to $61 million. Meidad Sharon founded ChargeAfter in 2017.
So given the current proliferation of BNPLs, here’s the most pertinent question we can ask. What makes ChargeAfter different? Thankfully, it’s not that it finances layaway for gasoline purchases. This recent development (thus far from Klarna and Zip), has fueled the debate over whether BNPL is truly responsible lending.
We’d point to a couple of things that do differentiate ChargeAfter.
First is its relationship with Visa. Back in early 2020, Visa made a $5 million investment in ChargeAfter. A few months later the two companies announced a “point of sale financing” pilot, which is essentially in-store BNPL. While uncommon two years ago, in-store BNPL is now table stakes for consumer platforms.
Multi-lender Model
Another differentiator is the fact that ChargeAfter aggregates multiple lenders, rather than financing purchases with its own funds. Sharon says this practice benefits consumers by giving them more options.
“While BNPL has exploded in popularity in recent years, the marketplace often gives consumers limited options and up to a 70 percent decline rate,” said CEO and Founder Meidad Sharon.
“Investor interest in ChargeAfter is a testament to the growing need for a network-driven financing platform made for merchants, banks, and financial institutions, as the industry rapidly shifts from a single lender, low-approval reality to a multi-lender experience where responsible lending and approvals rates upwards of 85% or more are the new norm.”
ChargeAfter also offers businesses a full spectrum of BNPL and other financing options on a white label basis. These include card-based installments, split pay, long and short-term installments, 0% APR financing, revolving credit, B2B financing, lease to own, and more.
A White Label Future?
Sharon said the funding will essentially help ChargeAfter continue down its current strategic path. Only bigger and faster.
“The investment will enable us to accelerate growth and further diversify our global lender and merchant networks while scaling strategic partnerships by providing leading banks, lenders, financial institutions, and industry partners a turnkey white label BNPL platform of their own,” Sharon said.
“Our ongoing investment in the platform will expedite the onboarding of thousands of additional retailers to provide responsible financing to millions of shoppers worldwide. Anywhere they shop.”
ChargeAfter’s white-label approach is one of the more interesting things about the company. When Square (now Block) acquired Afterpay, some analysts knocked the deal as paying $29 billion for a “feature.”
That critique may have been unfair. But it does highlight something we suspect about BNPL. We suspect BNPL will eventually become more of an embedded feature for merchants than a stand-alone branded financial product. And companies like ChargeAfter will be the enablers of this shift.
