Buy Now, Pay Later (BNPL) startups raising $1.8B in 2020.
In addition to Klarna reaching decacorn status in 2020 with a $850M raise, last month Affirm went public at a valuation to more than $28B billion, and Australian rival Afterpay is now worth more than $31B.
So far BNPL providers have not been required to run credit checks, relying instead on proprietary scoring models. Though that could soon change. With 1 of 10 people using BNPL services in the UK already in debt arrears elsewhere, the UK Financial Conduct Authority (FCA) have announced their intention to regulate the sector.
But, investors seem confident in long term BNPL growth. In January 2021 alone Scalapay, Alma, Twisto Payments, Beforepay, Tamara and Pace Now all raised further funding.