Big-ticket buy-now-pay-later competitor Payright has raised $12 million in an oversubscribed capital raise, bringing its total funding to $60 million within just 18 months.
Co-founded by brothers Myles and Piers Redward, Payright offers a buy-now-pay-later (BNPL) solution for items priced between $1,000 and $20,000, setting it apart from the likes of Afterpay, which has an upper limit of $2000, and Zip which caps sales at $1000.
The round was led by Escala Partners, and also included repeat backing from previous investors.
Since then, the business has continued to grow, Piers Redward tells SmartCompany.
Over the past 12 months, it has more than doubled its customer base, from 20,000 to 50,000. The number of merchants on the platform has grown from 1500 to 3000, with an average of about 200 joining every month, Redward says.
And, despite COVID-19 and the economic challenges it poses, the past two quarters have been “some of the strongest that we’ve had,” he adds.
“Merchant growth is up north of 200%.”
Part of this latest funding round is pegged for strengthening the fintech’s loan book.
But Redward says the business is also primed to grow and meet this new surge in demand. In particular, the co-founders are focused on growing their offering for home improvement purchases, health and wellbeing spending, and even for payments on things like dental treatments, solar panel installation and education.
The startup will also be investing in tech development to “strengthen our sales capacity”, and to improve the functionality for online sales, Redward says.
“Everybody is changing”
Payright is ultimately gearing up to meet a change in the tide in Australian fintech, and yet another trend that’s been exacerbated and rushed along by the COVID-19 pandemic.
The health crisis had led to consumers spending more time at home, and not in the shops. It’s led to increased use of digital solutions in all kinds of sectors, including to meet individuals’ financial needs. People are using products they may not have used previously, and becoming more used to the notion of fintech as a whole.
“Customers are feeling more comfortable with spending online as well as spreading the costs of those large-ticket items over time,” Redward says, “because they’ve had to”.
“They haven’t been able to go and have a discussion in store with a merchant, they’ve had to change their buying patterns,” he adds.
In fact, research commissioned by Payright found 56% of shoppers now prefer to use a buy-now-pay-later service than a credit card, he says.
“The awareness and the acceptance of BNPL has been strengthened over the last six months, or at least the last quarter,” he says.
By the same measure, merchants have also had to become more accepting of online sales, and the use of new payment tools, in order to serve their customers effectively from afar. And, frankly, to continue making any sales at all.
“Businesses are pivoting into a new normal — we’re obviously one of those businesses,” Redward says.
“Everybody is changing,” he notes.
“Businesses are pivoting and changing their models, consumer buying patterns are changing, and the methods of payment people are utilising are changing,” he adds.
“I don’t see it slowing.
“I think we’re moving into a new normal, and I see that trend continuing over the course of the foreseeable future.”