UK-based buy now, pay later provider Butter has closed a £15.8m funding round to help it take on the likes of AfterPay and Klarna in its home market.
The fresh capital injection comes from BCI Finance, the credit arm of London based venture builder Blenheim Chalcot, as well as a number of other private Angel investors .
Butter initially started life as the UK’s first buy now pay later travel agency, enabling travellers to spread the cost of travel arrangements over time, with full payment not due until after the trip.
With the Covid pandemic putting the brakes on international travel, Butter has since evolved into a fully-fledged BNPL shopping app, with over 100,000 customers, offering instalments across every consumer vertical.
Popular stores in the Butter app include Amazon, Argos, BooHoo, ASOS, H&M, Zara, Hugo Boss, Sports Direct, AirBnB, Currys PC World, Ao.com, and Ikea. Butter’s in-app universal checkout takes care of paying retailers, with customers then able to repay the costs over two, three, or four monthly payments.
The firm uses open banking data and machine learning to ensure that customers are only able to borrow amounts based on what they can afford, says Timothy Davis, co-founder and CEO.
“Our goal at Butter has always been to provide consumers with a simple and responsible alternative to credit cards and loans, enabling them to instantly spread the cost of anything from a takeaway to a holiday over a simple and transparent instalment plan, all within one easy to use account," he says. "We’ve set out to achieve this by building a platform focussed around transparency, responsible lending and the ability to transact on bigger ticket items compared to other providers, whilst also offering more choice to customers through our unique over-the-top solution, which enables consumers to shop any online store in existence with Butter."