Dutch ‘buy now, pay later’ (BNPL) tech startup in3 raises $11.1M in Series A funding to accelerate growth

The Buy now, pay later (BNPL) phenomenon has grown in popularity in recent years as customers seek alternative methods of financing. BNPL is a new payment option that allows consumers to receive their purchase right away (Buy Now), either online or in-store and then pay (Pay Later) for their purchase in instalments. BNPL is now revolutionizing the customer journey by being seamlessly integrated into e-commerce as a checkout option.

So far, BNPL accounts for only a small portion of overall credit card spending. However, with the coronavirus pandemic-fueled e-commerce boom, this alternative model of financing may be poised to disrupt the $8 trillion US payment card industry.

Funding in BNPL has grown from just $170 million in 2016 to over $4 billion in 2021. There are now more than 170 fintech startups competing in the BNPL space. Today, the BNPL space is dominated by big players like Klarna, Afterpay, and Affirm, with new players being born every month.

However, as consumer demand for these services soars, investors are looking for the next winners in the BNPL space. One of them is in3, a leading Dutch Buy-Now-Pay-Later (BNPL) fintech startup.

Today, in3 announced it has raised $11.1 million in a Series A funding round from Finch Capital to accelerate growth. In conjunction with the funding, in3 also announced the launching of free BNPL services for consumers, starting in the Netherlands, through an innovative partnership with global digital payments leader Worldline.

Working with payment service partners, in3 offers consumers the ability to pay for purchases in three instalments at zero costs: no interest or transaction costs and without credit registration. Current customers include Kwik Fit, EP, La Souris, Matt sleeps, Dekbed-Discounter. Through their partnership with WorldLine, in3 will provide them with a technology stack that will allow both online and offline merchants, who are part of the Worldline network, to offer BNPL payment services to its customers without additional integrations.

The BNPL payment in the Netherlands is expected to grow by 74.8% in 2022 reaching $7.6b. This growth has been spurred on businesses moving online and by the growth of e-commerce, more generally. The pandemic certainly helped propel the move online. Looking ahead, the BNPL payment adoption is expected to grow steadily at a CAGR of 32.8% over the next 6 years. The BNPL Gross Merchandise Value in the country will increase from $4.3b in 2021 to reach $41.7b million in 2028.

Hans Langenhuizen, CEO in3: “We will be supporting Worldline’s merchants by enabling them to offer BNPL to consumers at no fee. We look forward to working with their team and customers. This is testament to the robust platform of in3 and our dedicated team to create seamless integrations with all our partners.”

in3 was created in 2018 as an antidote to the traditional BNPL market, Hans Langenhuizen reflected on the early days: “Our founding team was part of the early wave of the BNPL movement in the early 2010s. It quickly became a crowded market so we stood back and took a fresh look at the BNPL model and saw several limitations in all of the available products. First, you need to pay the full amount within 14 days and there are very low spending limits. At the same time, we noticed a demand to pay larger expenses in instalments. But paying in instalments has even more disadvantages for consumers such as high-interest rates and they are documented in their national credit register. These products benefit people who cannot afford to buy at one time. This was not sustainable from perspective.”

“in3 was our honest approach to offer BNPL to consumers without costs which effectively allowed people to pay in 3 instalments within sixty days, with 0% interest. Because of the term of 60 days, registration in the credit registers is not required. This gives the consumer the possibility to buy what they want instead of compromising on quality products. For example, you can buy that refrigerator at no extra cost and then you have three salaries to pay for it. Our merchants profit from in3 in their checkout as well: it results in a substantial increase in transactions and importantly, a higher average transaction value. We see that the buyer more often goes for the more expensive product.”

Erwin Oudshoorn, Manager Direct Sales Netherlands: “BNPL is a tremendous value add for merchants in today’s uncertain times and we are thrilled to work with the team at in3 to expand our service offerings.”

To support the company’s rapid growth, In3 has secured a $11.1m funding round from Finch Capital. The capital will be used to further build out the technology platform and continuously invest in improved customer satisfaction through strategic hiring across the entire team.

Radboud Vlaar, MD Finch Capital: ‘’in3 has demonstrated a steady and consistent growth trajectory due to its strong technological capabilities and management which has enabled it to provide BNPL to Dutch consumers through integrations with payments providers. The company is enabling a truly omnichannel payments solution.’’