B2B Buy Now Pay Later Fintech Raises $40M

  • London-based fintech Hokodo has raised $40 million in Series B funding.
  • The startup offers buy now, pay later for products for business-to-business transactions.
  • Take a look at the 19-slide launch pad Hokodo used to raise funds below.

A startup offering a “Klarna-style” buy now and pay later option for business-to-business transactions has raised $40 million in fresh funding.

London-based Hokodo, which was founded in 2018, offers credit to SMEs and e-commerce businesses to pay for other businesses’ purchases. It differs from trade credit, a more traditional form of supply chain finance where repayment occurs within a specified time after a purchase, typically 30, 60 or 90 days.

The Buy Now, Pay Later market has been dominated by consumer products to date, with companies like Klarna and Affirm offering short-term financing at the checkout. Additionally, Apple introduced its own Buy Now, Pay Later product earlier this month.

Hokodo believes that the increasing shift of B2B commerce online has created a need for a corporate option to buy now and pay later. The startup allows sellers to offer credit at checkout while its API performs processes like credit decisions and fraud detection.

Unlike the consumer space, where the market has recently struggled, the B2B industry has been booming with a number of funding rounds in recent years, including a round for UK fintech Playter.

“We are fortunate to work with a group of investors who understand the potential of our business and the huge capacity gap between Hokodo and the competition,” Louis Carbonnier, Hokodo’s co-founder and CEO, told Insider.

“For this reason, their support of us has not been affected by the recent downturn in the market. In general, fundraising was a relatively straightforward process, but unfortunately I think that will not be the case for many startups.” … that they need to start an increase in the next year or two.”

The funding comes from Notion Capital together with European investors Korelya Capital, Mundi Ventures and Opera Tech Ventures. Hokodo previously raised funds from the likes of Mosaic, Anthemis and Wise co-founder Taavet Hinrikus.

“Some of the stories we see in the news about B2C BNPL firms like Klarna and Zip are really sad,” said Sami Ben Hatit, Co-Founder and CTO of Hokodo.

“It may seem like the Buy Now, Pay Later bubble is about to burst, but the news that Apple has just recently launched a pay later solution suggests that there is still demand among consumers for deferred payment options, as long as they are do well.” and by trusted suppliers.”

Hatit said the buy now, pay later B2B industry was “just getting started” and that while his solution was similar “in theory” to Klarna, there were many key differences. “The most important of those differences is that B2B BNPL does not encourage excessive spending or facilitate indebtedness among users,” he said.

Hokodo will use the new funds to expand into more European markets while developing new products, including buy now, pay later solutions for telesales and in-store purchases. The fintech currently has around 85 employees and will grow to 180 employees by mid-2023, Carbonnier added.

Check out Hokodo’s pitch deck below:

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