Frankfurt Probably no other German fintech has become so expensive so quickly. The Berlin financial start-up Mondu was only founded last August. Now Mondu, which offers online purchase on account for companies, could possibly be worth up to 300 million euros.
Because Mondu receives 43 million dollars (40 million euros), as the company announced on Monday morning. We led the round of financing from Valar Ventures, the investment company owned by tech billionaire Peter Thiel. The fintech had previously raised $14 million.
According to the industry portal “Deutsche Start-ups”, which had already reported on the upcoming round of capital a few weeks ago, Mondu’s valuation (“pre money”) was already 145 million euros. With the fresh funds, it should be significantly more. Mondu does not comment on this.
The case of Mondu, started by the experienced founders Malte Huffmann and Philipp Povel, shows that investors still have a lot of trust in special payment companies. The “Buy now, pay later” (BNPL) payment method that Mondu offers for companies is a major trend in online payments.
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But there was bad news this week from Swedish fintech Klarna, which popularized BNPL. Klarna, the most valuable start-up in Europe to date, is cutting ten percent of its jobs. There are also question marks in the valuation, the share prices of many listed payment companies such as Paypal, Affirm and Adyen have already slipped. BNPL companies in particular are likely to be affected by rising inflation and the slowdown in the economy.
The large capital round for Mondu is all the more remarkable. The core of BNPL is that online retailers can offer their customers, consumers or companies purchase on account and purchase in installments as simply as possible. These – actually traditional – payment methods are called BNPL in industry jargon and are considered an alternative to credit cards and payment methods such as Paypal. So far, Mondu only offers purchase on account. The fintech receives a kind of commission from the retailer, a small percentage of sales that go through Mondu’s payment method.
Up until now, invoice purchases have often been done on paper
Klarna has developed invoice and hire purchase for consumers. Merchants who use the payment methods pay a fee to Klarna, with Klarna offering a number of other services for commerce. Mondu wants to transfer the Klarna approach to the world of medium-sized companies – and is not alone in this.
Another Berlin fintech, Billie, has a similar business model. With Topi, a third German BNPL fintech wants to start. The idea behind it: dealers should sell more and be protected from the risk of default.
While Klarna primarily addresses merchants who sell to consumers, Mondu, Billie and Topi focus on merchants who target business customers (business-to-business, B2B for short) – this part is called “B2B payments”. of payment traffic, which is expected to grow significantly. “Small and medium-sized companies are increasingly buying online and still have relatively little access to financing,” explains co-founder Huffmann. He sees the opportunity to “build a relevant company”.
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It is not just about pure purchase on account, but rather about the clever integration into the systems of dealers and other companies that sell via online marketplaces. In itself, BNPL is not revolutionary for small and medium-sized companies, says Sebastian Maus, partner at the consulting firm Roland Berger. Purchase on account, financing and the purchase of receivables have existed for a long time. “But thanks to the automation, standardization and system integration at the dealers, there is a lot of potential for improvement that new providers are trying to leverage,” says Maus. Today, payments would usually still be made using paper invoices or by e-mail and subsequent bank transfer.
Markus Ampenberger, partner of the consultant BCG, sees it similarly. He also points out that the market for online payments by companies is generally growing. The number of B2B platforms is increasing. “Amazon Business is perhaps the best known, there are many other, often specialized marketplaces.”
Billie has changed his business model – for BNPL
Billie is counting on that too. The fintech, which was founded in 2016, has changed its business model – originally factoring, i.e. receivables financing, for online retailers – and now essentially offers online purchase on account for companies as a payment method. “We assume that retailers will set up more and more online marketplaces and sell to their customers online accordingly,” says co-founder Christian Grobe.
According to its own statements, the fintech is valued at 550 million euros. It works with its own factoring license. Mondu, on the other hand, is cooperating with Raisin Bank, which belongs to the Rasin interest platform, known for its Weltsparen brand.
By the end of 2023, Billie wants to launch an offer in all major European countries, Grobe announced. He points out that Billie is already cooperating with Klarna. Klarna managers have also invested in Mondu.
However, it is doubtful whether the German market is big enough for three fintechs with a similar offer. In addition, most small and medium-sized German companies have not had any major financing or sales problems. Many use the classic transfer after a purchase on account.
Ampenberger considers it understandable that Klarna, for example, does not push business with B2B retailers itself. E-commerce for companies works differently than online shopping for consumers in essential aspects – for example in the risk assessment of business customers. Consumers usually have to pay an invoice after 14 or 30 days. Companies have up to 120 days.
Nevertheless, market experts consider it possible that larger payment companies will first observe the development in the B2B segment and, depending on the development, later enter or buy in themselves. there would be a choice. Providers with corresponding BNPL products are already active in several countries.
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