Scalapay bags $155 million Series A at a $700 million valuation
Buy now, pay later (BNPL) venture Scalapay has raised $155 million in equity funding, at a $700 million valuation, as part of a Series A investment round led by Tiger Global.
Along with Klarna’s recent $46 billion valuation, this underscores just how hot the BNPL market is right now, given that Scalapay was only founded in 2019 and $155 million is a serious amount of money for a Series A round.
"Scalapay has quickly become an important player in European payments and the BNPL sector," says Alex Cook, Partner, Tiger Global.
"We are impressed by their product development pipeline and strong focus on merchant success. We are excited to support Scalapay in the next phase of its growth."
"While the likes of Klarna and Afterpay have launched deposit accounts and moved further into the banking space, Scalapay's exciting roadmap is laser focused on helping merchants with new customer experiences that increase conversion. They're leveraging BNPL in an entirely new way," says Francesco Filia, CEO at existing investor Fasanara Capital.
The new funding will go towards Scalapay's growing team and operations.
In July, it appointed Pingki Houang as General Manager, previously General Director at ShowroomPrive and Chief Executive at FashionCube, as well as Arlene Reynolds, previously Head of Global Operations at Just Eat, to oversee operations and country expansion.
The venture is also looking to scale internationally and launch new products to support merchants in luxury, fashion, and travel.
Citizens Advice research
One in ten shoppers who use buy now pay later have been chased by debt collectors, Citizens Advice claimed last week.
According to its research, these people were charged £39 million in late fees in the past year.
Of those who were referred to a debt collector for missed payments, 96% experienced a negative consequence.
They reported at least one of the following: sleepless nights; ignoring texts, emails and letters in case they were about debts; avoiding answering the door; borrowing money to repay the debt; or their mental health getting worse.
Yet the charity found that not one of the BNPL checkouts on leading retailers’ websites warned people they could be referred to debt collectors for missed payments. Instead this was only flagged in the T&Cs on a separate page, if at all.
Citizens Advice conducted mystery shopping at 100 leading retailers and found 38 offered BNPL, with 22 offering more than two options, meaning there were a total of 74 BNPL checkouts.
Out of those offering BNPL, only 11% warned shoppers they were taking out a credit agreement, the remaining 89% put this information in the small print or T&Cs.
Citizens Advice asked the BNPL firms featured in the research if they ever referred customers to debt collectors.
Klarna, Clearpay, Laybuy and Openpay confirmed they do this as a last resort. Splitit said it doesn’t. PayPal refused to comment.
Citizens Advice says it is s calling on the Treasury to urgently regulate this space as it “fears shoppers have been left unprotected and ill-informed during the rapid expansion of the sector”.
