Just five months post a $43 million Series A round, Berlin-based B2B buy now pay later payments startup Mondu has brought in an additional €20 million in a debt financing round provided by German bank Vereinigte Volksbank Raiffeisenbank (VVRB).
Mondu will use the capital further develop its product lineup, as well as push forward with ongoing expansion plans. Specifically, the startup is targeting the Netherlands, and opening an office in Amsterdam later this month. To date, Mondu has raised $57 million across two seed rounds and a Series A and now adds €20 million in debt funding to bring the total amount raised to approximately $76.4 million.
When Mondu splashed on the scene a year ago (yesterday) with a $14 million seed round, my first reaction was - Ok, but how much of that was debt funding? Firing back this very question to Mondu representatives, the answer I got was, “zero”. Checking the filings and cap table, the story checks out. Granted, these were the heady days of the pandemic where the money flowed like water (or wine, whatever your preference), but even still, an unknown coming out of the gate with $14 million in a seed round was enough to make me sit up and take notice.
Add to this the more recent appointments of former Boston Consulting Group Partner and Managing Director Julian Kurz to the role of Chief Commercial Officer and just days ago, Grover’s former VP People, Lauren Hoehlein Joseph taking on the role of Chief People Officer at Mondu, it’s become blatantly clear that the startup is no flash in the pan, but building on strength to strength, with both seasoned c-suite execs and investors including Peter Thiel's Valar Ventures, Cherry Ventures, FinTech Collective and a number of angel investors just as confident in Mondu’s B2B BNPL offer as it’s co-founders Gil Danziger, Malte Huffmann and Philipp Povel have been since day one.
”It's not every year that a startup like Mondu comes out of the gate - high growth, globally minded, laser-focused...and truly grounded in people-first integrity,” said Hoehlein Joseph. “The day-to-day operating values of the founders, in many respects, establish the culture from the beginning, and Mondu has been founded in the spirit of level-headed focus, intelligence, transparency, and trust. I was immediately impressed by their instinctive approach and excited by the prospect of further partnering with the team at such an early stage to build a powerful people capability in tandem with our game-changing product.”
Now having banked just over $76 million and stocked with a cadre of seasoned professionals, Mondu has cut its teeth across Germany and Austria and is now taking its win-win financing services, which includes a recently released pay over time option, for B2B operatives show on the road.
With Cross Border Commerce reporting that 48% of B2B orders in the Netherlands are placed online, and Satista forecasting Dutch B2B revenue to climb to $54.4 billion by 2025, targeting the Netherlands is a logical step for Mondu. Not only does this tap into a huge market, but also facilitates B2B cross-border trade between the Austro-German world and that of the lowlands.
“With Mondu’s BNPL solutions, B2B businesses in the Netherlands will be able to increase conversion rates and loyalty by allowing buyers to experience a fast and frictionless B2C-like payment experience with flexible terms,” further explained co-CEO Povel. “Local B2B businesses will have better cash flow management, minimise operational workload, and be able to effortlessly expand their operations by selling cross-border to buyers in Germany and Austria without risk.”
With $57 million hauled in in equity funding in under a year, you might be wondering why the shift to debt funding. The answer lies in what and where Mondu is intending to use the capital. In the case of this round, Povel told me that this new debt funding was earmarked for the company’s solid and stable receivables portfolio, an area where a dilutive equity round wouldn’t make sense.
If anything, a loan from VVRB, a member of the distinguished Group of German Cooperative Banks, should serve as even more validation of Mondu’s offer.
“We see incredible potential in Mondu and its outstanding leadership team. We believe that BNPL for B2B can have a significant impact on SMEs and we were well convinced by the concept the management team presented to us,” commented VVRB CEO Ralf Magerkurth.