divido bags $30m to take its ‘buy now, pay later’ platform to more markets
Divido Secures $30 Million Series B Funding for Global Expansion
Divido, a London-based provider of a white-label retail finance platform, has successfully raised $30 million in a Series B funding round. This capital injection is intended to accelerate the company’s international growth initiatives.
Investment Details
The funding round was spearheaded by prominent global banking institutions, HSBC and ING. Additional participation came from Sony Innovation Fund by IGV*, SBI Investment, OCS, Global Brain, and DG Daiwa Ventures. Existing investors, including DN Capital, Dawn Capital, IQ Capital, and Amex Ventures, also contributed to this financing.
Previous Funding and Initial Expansion Plans
This Series B round follows a prior $15 million Series A funding secured in 2018. At that time, Divido’s fintech solution was available in select European markets and the United States. The company initially aimed to launch operations in ten additional countries by the close of 2019.
However, the anticipated rapid international expansion did not fully materialize as planned. Currently, Divido operates within ten markets spanning two continents. Despite this, the new Series B funding is expected to significantly bolster the pace of its global outreach.
Divido’s Marketplace Model
Established in 2014, Divido operates on a marketplace model. This system facilitates competition among lenders to provide consumers with the most appropriate credit options for purchases. The platform collaborates with banks, retailers, and payment partners to integrate “buy now, pay later” solutions directly at the point of sale.
Reported Sales Increases and Client Base
Divido asserts that its platform can lead to sales increases of up to 20%-40% for retailers. The company currently reports having over 1,000 clients and operators, a figure consistent with data from September 2018.
Key benefits of the Divido platform include higher acceptance rates and reduced fees for consumers, offering them increased flexibility in financing larger purchases. Furthermore, by not requiring a banking license, Divido aims to facilitate faster scaling into new markets.
Creditworthiness assessments are conducted by the lenders participating on the platform, rather than by Divido itself.
Impact of the Pandemic and Market Trends
The recent pandemic has undoubtedly placed financial strain on many consumers, potentially increasing the demand for alternative credit options beyond traditional credit cards. This trend towards diversified “pay later” solutions predates the COVID-19 pandemic, spurred by the emergence of companies like Klarna and numerous subsequent startups.
Executive Statements
Christer Holloman, founder and CEO of Divido, stated: “The retail finance market is experiencing exponential growth, projected to reach $2.5 trillion next year. At Divido, we’ve established a global standard for banks, retailers, and payment partners to connect seamlessly and offer ‘Buy Now Pay Later’ options to consumers. We are thrilled to have this round led by global clients, which validates the strength of our product and the strategic value we provide.”
Catherine Zhou, Global Head of Venture, Digital Innovation and Partnerships at HSBC, commented: “There is a clear global demand for retail finance from both customers and merchants. The Divido platform empowers lenders to serve this demand with a compelling and well-managed offering.”
Jan Willem Nieuwenhuize, Managing Director of ING Ventures, added: “ING is concentrating its innovation efforts on specific value areas. Divido aligns with our lending value space and demonstrates a strong strategic synergy with ING’s consumer finance operations. This is a dynamic and rapidly expanding market, further accelerated by COVID-19. We recognize Divido as a leading innovator in the market, making it an ideal partner for dynamic, disruptive companies.”