Internet group Tencent co-led a $497m series B round for Italy-based buy now, pay later (BNPL) service Scalapay on Wednesday at a valuation of over $1bn.
The round was co-led by Willoughby Capital and included Tiger Global Management, Moore Capital, Deimos Capital, Gangwal and Fasanara Capital. It took the company’s total funding to over $700m.
Founded in 2019, Scalapay provides a payment service that lets shoppers stagger their payments across multiple instalments at no interest.
The product is already used by retailers such as Moschino, Decathlon, Nike, Samsonite and Pandora, and the company aims to double its headcount by the end of 2022 and expand its recently launched checkout cashback tool, Magic.
Johnny Mitrevski, Scalapay’s co-founder and chief technology officer, said: “There is an incredible opportunity for Magic to redefine European e-commerce, which has a lesser reputation compared to its US peers.
“With Magic, we have removed all the common friction points at checkout and addressed key reasons for cart abandonment such as signup or login, shipping, payment selection and privacy consents. We have done this whilst respecting Europe’s strict PSD2 and GDPR rules.”
BNPL services have exploded in correlation with the increase in e-commerce transactions throughout the covid-19 pandemic. Shoppers can make purchases they may not otherwise be able to buy through lump sums, while merchants can access a wider customer base.
Tencent participated in a $239m equity and debt round for France-based BNPL service Alma two weeks ago, having previously taken part in business-to-business BNPL platform Billie’s $100m series C round in October 2021.
Financial services firm Standard Chartered invested $500m in Singapore-based BNPL service Atome Financial, a subsidiary of fraudulent payment prevention technology developer Advance Intelligence Group, through a strategic partnership the same month.
Other notable deals in the sector over the past year include a $190m series B round for UK-based Zilch, Saudi Arabia-headquartered Tamara’s $110m series A round and a $70m round for India-based Uni.
Tiger Global led Scalapay’s $155m series A round, which included Baleen Capital, Woodson Capital, Fasanara Capital and Ithaca Investments, in September 2021. It came eight months after Fasanara Capital led a $48m seed round in January 2021 backed by Baleen Capital and Ithaca Investment.
