BNPL: The Startups

Dear Readers,

Welcome back to the Next Gen Fintech (NGF) Newsletter! In our last edition, we explored the world of Buy Now, Pay Later (BNPL). Today, we're diving into three startups in the BNPL space that are reshaping the way we approach consumer credit in retail and e-commerce. Whether you're a fintech enthusiast, an investor, or simply curious, this article will equip you with insights into the innovators leading this financial revolution.

Let's get started!

Klarna:

• Location: Stockholm, Sweden
• CEO: Sebastian Siemiatkowski
• Overview: Revolutionizing retail with its interest-free "pay later" service, Klarna has attracted over 150 million active users worldwide (2022), handling millions of transactions each month.
• Financials: Valued at about $20 billion, Klarna reported impressive growth with a revenue of SEK 23.5 billion (around $2.45 billion) in 2023, showcasing a 22% year-on-year increase.
• Funding: The company has raised over $4.5 billion, reflecting strong investor confidence.

Affirm:

• Location: San Francisco, USA
• CEO: Max Levchin (also co-founder of PayPal)
• Overview: Affirm is redefining the payment landscape by offering a transparent and straightforward buy now, pay later service that allows consumers to split the cost of purchases with no hidden fees. It serves millions of users and partners with major retailers to enhance the shopping experience.
• Financials: As of 2024, Affirm manages a user base of nearly 18.7 million and handles annual payments worth $26.6 billion. The company has shown substantial growth with its diverse offerings and strategic market positioning.
• Funding: Affirm went public in January 2021, and prior to its IPO, it raised approximately $1.5 billion in venture capital.

AfterPay:

• Location: Melbourne, Australia
• Co-CEOs: Anthony Eisen & Nick Molnar
• Overview: Afterpay has transformed the retail industry with its innovative payment platform that allows customers to buy now and pay later in four interest-free installments. This service caters especially to millennials and Gen Z shoppers, enhancing accessibility and convenience across numerous retail sectors.
• Financials: Afterpay was acquired by Square (now Block, Inc.) in August 2021 for $29 billion, one of the largest deals in fintech history. Before the acquisition, Afterpay had reported significant growth, reaching over 14.6 million active users and being available at thousands of retailers.
• Funding: Initially supported with over $450million from venture funds, Afterpay expanded rapidly, benefiting from strong market demand and investor confidence which culminated in its public listing (in 2016) on the Australian Stock Exchange before its acquisition.

Newsletter Outlook

At NGF, we aim to keep you informed about the technological advancements driving the fintech industry.

Thank you for being a part of the NGF community. Stay tuned for our next issue, and as always, your feedback is invaluable. Do you use any of these startups? Let us know!