Vartana Secures $57M Funding to Affirm for B2B

The Rise of B2B "Buy Now, Pay Later" Options

The landscape of buy now, pay later (BNPL) is expanding beyond the consumer market, with an increasing number of startups now concentrating on business-to-business (B2B) transactions.

This shift acknowledges the fact that businesses, like individuals, often require more adaptable payment arrangements.

Recent Funding in the B2B BNPL Space

Several companies have recently secured significant funding. Resolve, an Affirm spinout specializing in B2B BNPL, announced a $25 million equity raise in December.

Billie, based in Berlin, completed a $100 million Series C funding round. TruePay, a São Paulo-based startup only a year old, recently obtained $32 million in Series A financing.

Vartana: Aiming to be the "Affirm for B2B"

Vartana is the latest BNPL startup targeting the B2B sector, seeking to emulate the success of Affirm – founded by PayPal co-founder Max Levchin – in the consumer BNPL market.

Established in June 2020 by former KeepTruckin employees, the name "Vartana" was chosen as it translates to "financial wellness" in Sanskrit, according to CEO Kush Kella.

The company is now publicly launching after a period in stealth, backed by $7 million in equity funding and $50 million in credit.

A Platform for Business Purchases

Co-founders Kella and Ahmed Sharif are developing a buy now, pay later and checkout platform specifically designed for business-to-business purchases.

Kella explained to TechCrunch that they identified inefficiencies and delays in the transaction process, leading them to believe the entire process could be digitized, moving away from reliance on email and manual paperwork.

Their goal is to provide businesses with the same payment flexibility that Affirm offers consumers.

Target Customers and Functionality

Vartana primarily targets mid- to late-stage technology companies and their resellers.

After a private beta period since last June, the platform is now available to the public, having experienced a 100% quarter-over-quarter growth in transaction volume.

The system pre-approves customers for payment plans within the sales process, utilizing automated underwriting technology. Customers can then select their preferred payment options and finalize transactions “within minutes” through an integrated checkout experience.

An Example Scenario

Consider a company needing to purchase 50 Salesforce licenses, potentially costing $50,000 upfront. Instead of a large immediate payment, or seeking a traditional loan, Vartana allows for spreading out these costs over time. (Note: Salesforce is not currently a Vartana user.)

Vartana offers payment terms ranging from 12 to 60 months.

“Many businesses don’t have the budget to pay for that kind of thing upfront,” Kella stated.

A Competitive Landscape

The B2B BNPL space isn’t expected to be dominated by a single player. There appears to be ample opportunity for multiple startups, each catering to distinct business types.

Resolve, for instance, concentrates on marketplace and e-commerce transactions, offering shorter payment terms in a self-service manner. Vartana, conversely, focuses on the technology sales market, facilitating collaboration between sellers and buyers and providing financing for purchases exceeding 12 months, such as software or hardware.

“Our technology is focused on helping buyers and sellers collaborate and deal with more complex transactions,” Kella, a founding engineer at KeepTruckin, told TechCrunch. “We focus on businesses trying to acquire a technology product that could range in price from $10,000 to $1 million.”

Fee Structure

Vartana charges a fee – a percentage based on contract length – to the seller of the technology product. In some instances, this fee can be passed on to the buyer if the seller prefers.

Funding Details and Future Plans

Audacious Ventures led the equity financing, while i80 Group provided the credit. Flex Capital and several angel investors – including KeepTruckin CEO Shoaib Makani, Lime president Joe Kraus, Rubric CEO Bipul Sinha, Slack CFO Allen Shim, and Rippling CFO Adil Syed – also participated.

Vartana intends to utilize the funding to enhance its product roadmap and expand its team, currently comprising 17 members across engineering, operations, and sales.

Investor Perspectives

Nakul Mandan, founder and partner at Audacious Ventures, highlighted that every enterprise business his firm invests in prioritizes cash flow and prompt payment, while also benefiting from increased sales velocity through flexible payment terms.

He believes Vartana provides an elegant solution for both vendors and customers, making it relevant to a wide range of B2B companies.

Audacious was particularly impressed by the team’s vision for a comprehensive checkout solution integrating technology, customer financing, and sales process management.

“It’s truly a holistic approach to solve what sales reps need to get their customers to quickly close deals,” Mandan concluded.