Mondu raises scale-up funds with Series A

German start-up looks to capitalise on the $200 billion opportunity available in the B2B BNPL market

by | May 30, 2022 | bobsguide

German B2B buy-now-pay-later (BNPL) group Mondu has raised $43 million in a Series A round to scale its capabilities by investing in its product and customer acquisition.

The capital raise comes amid the group’s plans to expand into more European countries later this year, starting with Austria this summer.

Venture capital fund Valar Ventures led the financing round, with participation from Cherry Ventures, Fintech Collective, and tech entrepreneurs and senior executives from Klarna, Zalando and SumUp.

“This Series A and the backing of our European and US investors will support us to rapidly scale our product and customer reach ahead of further expansion in Europe later this year,” said Philipp Povel, co-found and Co-CEO of Mondu.

To date, the company has raised $57 million, having raised $14 million in seed financing last year.

Established in 2021, Mondu provides business customers with a B2B deferred payment checkout solution. It integrates into the B2B checkout via API or widget.

The latest financing builds upon Mondu’s partnership with banking-as-a-service provider Raisin Bank last month, delegating payment processing and regulatory compliance to the latter

Since the service agreement, the German start-up also partnered with payment automation platform Primer to enable merchants to integrate Mondu’s BNPL solution in their online checkouts.

Race to capture untapped B2B BNPL market begins

Mondu’s drive towards the BNPL service for B2B look to capitalize on the growing industry, which Povel believes has a $200 billion opportunity just in Europe and the US.

Despite the prospect, most BNPL products have been focused on the B2C markets, with B2B firms moving into the space more recently.

“BNPL for B2B sits at the intersection of three huge markets that are all in transition. The B2B payments market is immense, and its transition to digital has been accelerated over the past couple of years,” said Andrew McCormack, founding partner of Valar Ventures.

Mondu is not the only firm seeking to capture the unclaimed market share, with lots of industry players racing to fund their development.

In March, UK start-up Playter raised $1.7 million in seed funding to support its growing B2B BNPL service.

Another UK BNPL start-up, Tranch, also raised £3.5 million in May in pre-seed equity and debt funding to support its growth and expansion into the US.

That same month, Swedish BNPL firm Treyd also raised $10.5 million in Series A to fund its expansion into the UK market.

Fintech looks to navigate through tech stock sell-offs

Although the companies have been enjoying the growth period in recent years, an ongoing tech stock sell-offs have begun impacting some of the industry players.

While some have sought out new funding and partnerships to push through the trying times, others have resorted to downsizing to save cash.

B2C BNPL powerhouse Klarna announced last week that it would lay off 10percent of its global staff due to adverse market conditions.

Australian peer Bizpay also laid off 30percent of its workforce earlier this month.

Beyond BNPL players, the likes of Nuri, a German digital bank, and Uncapped, a revenue-based finance start-up, also trimmed their headcount.

This marks the first prolonged contraction in fintech market caps in over a decade – the February/March 2020 sell-off lasted for just over a month, while at time of writing the S&P technology index has been trending downwards for five months, with an uptick in early April.

The downturn could signal a more favourable set of conditions for banks seeking to partner with, acquire or invest in fintech counterparts.

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