By Daniel Lanyon on Tuesday 30 March 2021
Buy-Now-Pay-Later fintech Butter initially focused on the travel sector but has since expanded to take on the giants like Klarna in the fast-growing sector.
Butter, a London based fintech platform that started life as the UK’s first Buy Now Pay Later (BNPL) travel agency, has just closed a £15m funding round.
Following a big pandemic pivot, Butter has raised £15.8m from BCI Finance, the credit arm of London based VC Blenheim Chalcot, as well as, AltFi understands, a number of unnamed angel investors in the fintech space. The cash will be used to accelerate the rollout of its open-banking based BNPL shopping app.
Co-founded by Stefan Hobl, Nik Haukohl and Timothy Davis in 2017, when it also became the first BNPL lender in the UK to receive FCA permissions, Butter initially allowed travellers to spread the cost of flights, with payment not due until after the trip. Today it has 100,000 customers, offering instalments across every consumer vertical.
Timothy Davis, co-founder and CEO of Butter, says the firm’s goal has long been to be a responsible alternative to credit cards and loans but the pandemic, and subsequent crash in foreign travel, prompted the firm to pivot to a broader remit. It launching the UK’s first BNPL shopping app alongside the travel offering, enabling customers to spread the cost of any purchase from any online store.
“We want to remove the stigma surrounding the buy now pay later offering and empower consumers by allowing them to budget and spend intelligently and in a manner that suits their individual financial needs,” Davis said.
“We’ve set out to achieve this by building a platform focussed around transparency, responsible lending and the ability to transact on bigger ticket items compared to other providers, whilst also offering more choice to customers through our unique over-the-top solution, which enables consumers to shop any online store in existence with Butter,” he added.
Butter says its service, unlike other BNPL providers, offers an “over-the-top” solution allowing customers to spread the cost of purchases without requiring merchants to support Butter via a technical integration. Customers can choose to repay the costs over two, three, or four monthly payments. Popular stores in the Butter app include Amazon, Argos, BooHoo, ASOS, H&M, Zara, Hugo Boss, Sports Direct, AirBnB, Currys PC World, Ao.com, IKEA and more.
Butter’s credit decisioning process uses open banking and, it says, machine learning, to safeguard affordability.