London-based buy now pay later (BNPL) platform for businesses, Tranch is coming out of stealth after raising £3.5 million in pre-seed equity and debt funding. The investment was led by Flash Ventures and Global Founders Capital. The round also included a debt facility from Columbia Lake Partners.
With plans to roll out in the U.S. later this year, the BNPL platform also received backing from the Y Combinator and will join YC’s Summer 2022 cohort this year. Proceeds of the investment will be used to grow the team, as well as onboard more suppliers across multiple verticals as the company continues its growth in the U.K. and the U.S.
Companies waste $20 billion a year globally paying premium monthly fees for annual SaaS contracts that they could pay for upfront and in full if it wasn’t for cash flow constraints.
Founded in 2021 by Philip Kelvin and Beau Allison, the startup aims to eliminate this wastage. It enables companies to pay for SaaS and other business services on terms that work for both them and their suppliers.
By offering a ‘Pay with Tranch’ payment method, SaaS sellers and other professional and business services providers provide their end-customers with an alternative way to pay for contracts worth up to £250,000. Instead of settling bills in full within a standard 30 to 90 day term, an end-customer that chooses to pay with Tranch can spread the cost of their contracts over six to 12 months.
Philip Kelvin, co-founder and CEO of Tranch, said: “Payment options for crucial SaaS tools and other business services have been inflexible until now. ‘Pay with Tranch’ solves that huge and costly problem, by putting flexibility and choice at the heart of the payments process in a way that works simply and favourably for both suppliers and buyers.”
Yash Zaveri, partner and MD at Flash Ventures said: “B2B BNPL players so far have been largely focused on B2B e-commerce where ticket sizes are small and lenders rely on standard credit data to make limited credit decisions. Tranch is making B2B BNPL accessible to more complex lending demands involving larger volumes and longer durations, all of which creates a hugely scalable international market opportunity through their full lending tech stack.”