Milan-based buy now pay later player Scalapay has raised $155 million in equity funding in a Series A round. In line with many other BNPL providers, Scalapay offers consumers the ability to spread the cost of an item over 3 interest-free monthly installments. The new funding will be used to accelerate international expansion efforts as well as the launch of new products designed to support luxury, fashion, and travel merchants. In the two years since its launch, Scalapay has raised approximately $203 million.
In a day and age when Klarna has a market valuation of $46 billion, Square laid down $29 billion to acquire BNPL player Afterpay, and PayPal shelled out $2.7 billion to grab Japan’s Paidy, it’s a fair statement to make that the buy now pay later space is hotter than a stack of flapjacks on Sunday morning.
So what’s the $155 million differentiator in Scalapay? While other players have launched deposit accounts and moved deeper into the banking space, Scalapay has taken a different route and is putting its focus clearly on the merchants themselves. Through a more flexible and optimised payment process, Scalapay partners are opening up new customer experiences, and here’s the key, increasing conversions. According to the startup, partnered retailers have seen average basket sizes increase by 48%, and an increase in conversion at checkout by 11%.
Scalapay co-founder and CEO Simone Mancini comments, “We are giving customers the ability to enjoy the small pleasures in life without needing to compromise; a favorite fragrance, dress, or romantic weekend. We want to bring the Italian concept of dolce vita and slowing down to enjoy the small things in life – to the rest of the world, via our partners.”
The startup has found particular success in the luxury fashion industry, with brands including Alberta Ferretti, Intimissimi, Liu Jo, Luisa Spagnoli, Moschino, MSGM, and Twinset all partnered. Adding credence to its credentials in the sector, Scalapay has recently inked a three-year deal as the preferred BNPL platform at the Milan Fashion Week.
“We’ve seen strong demand for luxury fashion over the past year, many younger customers are using Scalapay to treat themselves to a Prada bag or Valentino shoes that they love and have been dreaming about. Doing so in a financially responsible way, by paying over time, adds to the pleasure of making the purchase. We typically see 30-50% of the transactions from our luxury fashion merchants being done with Scalapay, the customer uptake has been very exciting,” said CTO Johnny Mitrevski.
In addition to Tiger Global’s lead, Scalapay’s Series A round saw the participation of new investors Baleen Capital and Woodson Capital who join existing investors Fasanara Capital and Ithaca Investments.