Flash Ventures, Y Combinator back BNPL challenger Tranch in pre-seed

UK buy-now-pay-later (BNPL) start-up, Tranch, has raised £3.5 million in pre-seed equity and debt funding to support its growth and expansion into the US.

The start-up intends to use the investment to grow its team and onboard more suppliers.

Investors Flash Ventures and Global Founders Capital led the funding round, with participation from the technology start-up accelerator group, Y Combinator.

The funding round also included a debt facility from UK venture capital group Columbia Lake Partners.

Tranch technology will integrate into the SaaS sellers and other service providers’ payment platforms, enabling them to offer customers flexible payment terms. Customers will be able to spread the cost of their purchase of contracts worth between £10,000 to £250,000 over six to 12 months.

Customers who opt to use Tranch for payments will receive a commitment-free credit line of up to £250,000 after connecting their bank account on the Tranch platform.

Once the transaction has been approved, Transact directly pays the supplier, setting up an automated collection from the buyer’s account via its payments partner GoCardless.

“B2B BNPL players so far have been largely focused on B2B e-commerce where ticket sizes are small and lenders rely on standard credit data to make limited credit decisions,” said Yash Zaveri, partner and MD at Flash Ventures.

“We’re excited to see Tranch making B2B BNPL accessible to more complex lending demands involving larger volumes and longer durations, all of which creates a hugely scalable international market opportunity through their full lending tech stack.”

Tranch’s capital raise highlights the growing interest in BNPL industry, which is expected to reach $680 billion in 2025 in the US alone, according to Insider Intelligence research .

Its offering to lend larger amounts for a longer duration also underscores the growing maturity of the BNPL market, which typically sees up to a 90-day tenor.

As the market matures, BNPL credit providers have also been under increasing public scrutiny for incentivising consumers to take on more debt than they can afford.

In the UK, BNPL lenders have responded to the scrutiny by expanding their collaboration with credit rating agencies to be more transparent.

Swedish group Klarna will begin reporting to Experian and TransUnion on customer obligations and repayments from June.

London-based Zilch is also in partnership with Experian for reciprocal reporting of Buy Now Pay Later credit information.

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