billie Raises $100M to Revolutionize B2B Buy Now, Pay Later

The Rise of B2B "Buy Now, Pay Later" and Billie's $100 Million Funding

Buy now, pay later (BNPL) services, such as Affirm, Klarna, and Afterpay, have experienced substantial growth as consumers increasingly seek alternatives to traditional credit for delayed payments. A Berlin-based startup, Billie, is capitalizing on this trend, focusing specifically on B2B transactions.

Series C Funding and Expansion

Billie has secured $100 million in a Series C funding round. These funds will be allocated to expanding its suite of BNPL services for businesses, both within Europe and in new international markets. The company recently surpassed 100,000 customers earlier this year.

Valuation and Competitive Landscape

The funding round reflects the increasing popularity of BNPL within the payments industry and strong investor interest. Billie’s valuation has reached $640 million, representing nearly a fourfold increase since its previous $35 million (€30 million) Series B round in 2019.

This is reportedly the largest funding round to date in the B2B BNPL sector. Key competitors in this space include Resolve, a spin-off from Affirm, and Tillit, which is backed by Sequoia (also an investor in Klarna).

Strategic Investors and Partnerships

Billie’s investor base is a notable combination of financial and strategic partners. London-based Dawn Capital, specializing in B2B startups, led the round. Internet giant Tencent and Klarna also participated, alongside existing investors Creandum, Speedinvest, Picus, and GFC.

A significant development is the strategic partnership between Klarna and Billie. Billie co-founder and co-CEO Matthias Knecht explained that the integration will allow Klarna to handle consumer transactions when Billie has a stronger payments relationship, and conversely, Billie will manage business purchases when Klarna is not already involved.

Debt Refinancing and Financial Capacity

Alongside the equity funding, Billie has secured $200 million per month in debt refinancing. This financing, provided by a consortium of German banks including VVRB, Raisin Bank, and Varengold Bank, will support the company’s BNPL financing operations.

Billie's History and Core Ambition

Founded in 2016, Billie has been pioneering BNPL solutions for businesses even before the concept gained widespread recognition. The company’s initial goal was to address the disparity in tools available for B2B versus B2C transactions.

Recognizing that B2B transactions account for more than twice the volume of B2C transactions, Billie aimed to simplify these processes for businesses, particularly small and medium-sized enterprises (SMBs).

Beyond Financing: Invoicing Services

In addition to its financing solutions, Billie offers an invoicing service to facilitate payment collection for businesses. This service, reflected in the company’s name (“billing”), remains a significant part of its operations.

While 95% of businesses still prefer invoice payments, Billie is currently prioritizing growth in its BNPL offerings with this new investment.

Why B2C Players Aren't Dominating B2B

A key question arises: why aren’t established B2C BNPL providers more actively involved in the B2B market? Knecht suggests it stems from differing data requirements and market dynamics.

“B2C players view themselves as strong consumer brands,” Knecht stated, noting the increasing focus of companies like Klarna on building direct-to-consumer shopping experiences.

Furthermore, business purchases are inherently more complex than consumer transactions, often involving significantly larger transaction amounts – typically ranging from €60 to €100.

The Scale of the B2B E-commerce Opportunity

The B2B e-commerce market represents a substantial opportunity. Estimates suggest it currently accounts for between 14% (2020) and 17% (2023) of all U.S. e-commerce, projected to reach $1.7 trillion by 2023.

Other estimates indicate that B2B e-commerce was already five times larger than B2C as of 2020, totaling over $21 trillion in global sales.

Potential for Consolidation and Acquisition

As the B2B BNPL space matures, consolidation is likely to occur. This positions Billie as a potential acquisition target for larger payments companies seeking to expand their platforms and integrate BNPL functionality.

Josh Bell, General Partner at Dawn Capital, commented, “We’ve been closely following Billie and the evolution of the B2B BNPL market… We are confident they are well on the way to revolutionising the B2B payments market.”

Knecht declined to comment on potential mergers and acquisitions but described Klarna as a “close relationship.”