Like e-commerce As the market grows, startups are rushing to help online retailers sell larger items to consumers with so-called “buy now, pay later” options. Via BNPL, consumers turn a one-time purchase into a limited chain of regular payments.
The terms vary, but the space is very active. TechCrunch covered Scalapay’s $ 48 million round in January, which Italy’s BNPL described as a seed round. Also this year, we saw Alma from France raise a Series B of $ 59.4 million for its BNPL efforts. And I recently covered Wisetack’s total $ 19 million fundraiser as it seeks to make more noise about its service which focuses on real-world transactions like home improvement.
But unlike some booming startup niches where we lack visible results from the major players to use as a lens to examine the market, we have a number for the BNPL space. This morning, to better understand what’s going on with the startups hoping to help fund your next wrong purchase, let’s take a look at the results from Klarna, Afterpay, and Affirm.
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Klarna, based in Sweden, would consider direct registration. His 2020 results are here. Afterpay, based in Australia, went public a few years ago. Its results for the first half of 2021 are here. And then there’s Affirm, the recently opened BNPL company in the United States that had a recent direct listing. Its fiscal results for Q2 2021 (Q4 calendar) are here.
Let’s see how the three do, learn some lessons for the mix, and then check our gut to find out what their results might mean for BNPL startups around the world.
The BNPL cohort of startups is showing signs of further verticalization to find veins of market demand that remain untapped by the biggest players in their market. So while Affirm wants to consult you everywhere online, giving you refund options wherever you travel digitally, Wisetack wants to integrate with a particular set of merchants. The latter model could provide startups with similar and narrower market goals the ability to better understand their economy and perhaps generate more total margin on their loans.
This is far from saying that even with the information we have, we think directionally. But this is both fun and illustrative, so let’s go. First of all, Klarna.
This morning we will be looking at Klarna’s Q3 2020 report and her Q4 report from the same year.
The bottom line is that Klarna has had a super strong 2020. In her third quarter update, Klarna wrote that she had seen 43% growth in gross cargo volume in the first nine months of the year. In his fourth quarter report, he noted an annual GMV growth figure of 46%. From this we can guess that Klarna had a great fourth quarter.
Regarding the US market, Klarna first reported “10 million consumers in total in [the Q3] by the end of the period, and $ 11 million by the end of October. And for the full year, he wrote that he had seen “15 million consumers choose to shop at Klarna by January 2021” in the United States. Again, these look pretty good.