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More VC investment confirms point-of-sale as fintech hotspot




By Ryan Weeks on 6th September 2016


Marketplace-based point-of-sale finance provider Divido has closed a £2.5m seed round, with popularity spiking post-Brexit.

 

Divido has closed a £2.5m seed round led by European venture capital firm Mangrove Capital Partners, an early investor in Skype. London-based venture firm DN Capital also participated. In addition to the seed money, Divido was recently awarded a £200k grant by the government’s innovation agency, Innovate UK, for its role in introducing increased transparency and competition into the point-of-sale market.

 

Divido’s approach is to fund its point-of-sale activities through a proprietary marketplace, fuelled by multiple sources of funding – with a collective firepower of roughly £500m per annum and up to £25k for each individual transaction. Divido sees the marketplace model as effecting “higher approval rates, lower fees and the broadest possible range of finance options”.

 

Those options include deferred payment, 0% finance and low cost credit. “When surveyed, 77% of retail customers said they would not have made their purchase if it wasn’t for the fact that Divido was offered,” explained Divido CEO and co-founder Christer Holloman (pictured above), who previously launched $1bn start-up Glassdoor.com in EMEA. Divido’s revenue model involves charging an initial set up fee and monthly fees to merchants.

 

Divido is a paperless solution that works in store, online or over the phone, and is currently used by over 100 retailers as a means of offering point-of-sale financing options on consumer purchases. Interestingly the company, true to the fintech party line, suggests that post-Brexit uncertainty may in fact be delivering a significant boost to the point-of-sale consumer finance sector. Rather than holding off from big-ticket purchases, consumers can use services like Divido to spread the cost of a purchase over a number of weeks or months, while the retailer is still paid immediately.

 

Perhaps in part for that reason and others, point-of-sale has emerged as a real hotspot within the broader alternative finance sector of late. A number of point-of-sale providers – from various different geographies – have been making moves. The Goldman Sachs-backed Financeit launched a new point-of-sale product for businesses in late August, just days before Australian Stock Exchange listed zipMoney published its FY16 results – showing strong revenue and transaction growth for the platform.

 

Christer and his team have built a very resilient and highly scalable payment solution and the company’s rapid growth is testament to the value it provides to retailers,” said Michael Jackson, partner at Mangrove Capital Partners. “We’ve passed numerous fintech opportunities up until now and we’re confident we’ve backed the right horse.”

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