France-based buy now, pay later (BNPL) service Alma raised €210m ($239m) yesterday in a series C equity and debt round featuring internet group Tencent, highlighting the growing popularity of that model.
The round comprised approximately $131m in equity funding and $108m in debt and included BPIfrance’s Large Venture fund, Cathay Innovation, Seaya Ventures, Picus Capital, GR Capital and Roosh Ventures.
Alma provides a number of BNPL options both for consumers and business-to-business transactions, allowing for payments to be made across three or four instalments, 10 or 12-month repayment plans or options to pay for an item up to 30 days after purchase.
Proceeds from the round will be used to expand the reach of the platform across continental Europe, expanding it into Ireland, Austria, the Netherlands, Luxembourg and Portugal.
The BNPL model has emerged from the fringe to become a mainstream financing model in recent years despite concerns about widespread indebtedness. It has particularly grown among younger demographics who opt to make larger purchases and split payments across a longer period of time.
On the other side, more and more merchants have been allowing BNPL services as it gives them access to a new cache of customers. Its use surged throughout the covid-19 pandemic, rising in tandem with e-commerce sales, while funding for BNLP providers has progressed at a strong clip.
Tencent had already invested in a $100m series C round for Germany-based B2B BNPL services provider Billie in October 2021 alongside the largest pure-play operator in the BNPL space, consumer finance provider Klarna.
Sweden-headquartered Klarna is one of the most highly valued venture capital-backed companies worldwide, having achieved a $46bn valuation in a $639m round led by telecommunications and internet group SoftBank’s Vision Fund 2 in June 2021. Bonnier, Ant Group, Commonwealth Bank of Australia, Bestseller, H&M and Visa are among its earlier investors.
UK-based instalment payment service Zilch closed its own equity and debt round in July 2021, a $190m series B that included publisher Daily Mail General Trust and investment banking firm Goldman Sachs’ Asset Management unit.
Other notable deals include a $110m series A round for Saudi Arabia-headquartered Tamara in April 2021 that included e-commerce payment processing firm Checkout.com and India-based Uni’s $70m series A eight months later. On the exit side, digital payment processor PayPal agreed in September to acquire portfolio company Paidy in a $2.7bn deal.
Alma co-founder and chief executive Louis Chatriot said: “We are developing a safe, reliable solution that resonates with the expectations of merchants and consumers.
“We want to be part of consumers’ daily lives and help them buy better, not just more. We want to be an effective and healthy alternative to traditional consumer credit. It is important for us to accompany the growth of merchants by bringing them new consumers in a balanced relationship, as opposed to what we see with the big digital platforms.”
The company currently boasts 6,000 merchants among its customer base, including French retailers and e-commerce marketplaces such as Alain Afflelou, Etam, Printempts, Galeries Lafayette and Ankorstore.
