A merchant-focused payment solution founded by two Wollongong mates in 2019 has achieved unicorn status after securing $692 million in a Series B round, with CTO Johnny Mitrevski telling Business News Australia the money will go towards acquisitions and doubling staff levels over the next year.
Mitrevski co-founded Scalapay with his friend Simone Mancini after visiting Italy and observing a lack of buy now, pay later (BNPL) options. Taking lessons from an advanced but saturated Australian market, the pair applied the fintech model to continental Europe where they now service more than 1,500 merchants.
The unicorn is based in Italy's industrial heartland of Milan where it is an official sponsor of Milan Fashion Week which is currently underway, but the tech scale-up has an Australian presence for its leadership.
Mitrevski plans to mark the achievement by throwing a pool party to celebrate breaking the $1 billion valuation barrier, but only after the daily grind is finished.
"The idea of the unicorn is you've broken through some kind of barrier and it is just something to celebrate," he told Business News Australia.
“When you first start out, your first goal is to get that first customer, and then you want a million customers or your first merchants and so on.
The funding round was led by Chinese tech heavyweight and WeChat owner Tencent as well as New York-based Willoughby Capital. The round included previous backers Tiger Global and Fasanara Capital, plus new investors Gangwal Capital, Deimos Capital and Moore Capital.
The new funding round comes less than six months after a $155 million Series A led by Tiger Global in September 2021. Since then, Scalapay has grown its payment volume three times month over month.
“The core development team is built out of the Innovation Campus in Wollongong and is one of the real strengths of the company,” CTO Mitrevski.
“It’s a true testament to Australian skill and willingness to make it work that we can deliver cutting edge technology and amazing customer experiences from our home to countries abroad.”
Mancini is the link to Italy, where his story resonates especially well – his dad bought a one-way ticket to Australia, and he has now bought a one-way ticket back.
“Our journey started in Australia just three years ago. It's been a truly amazing experience going from working at a Bondi cafe to becoming one of the most important payment companies in Europe with 200 people operating across six different countries,” CEO Mancini said.
Scalapay’s innovative payment solution for e-commerce merchants allows customers to buy now and pay later without interest. Customers are offered three options, pay in three or four instalments or entirely after 14 days.
Scalapay, which differentiates itself from other BNPL businesses through its focus on merchants, has also launched a new platform called Magic.
The checkout platform has been developed as a solution to a merchant pain-point identified by the Scalapay team – which effectively cuts out the clunkiness on the customer side.
There has been quite a downturn in the BNPL market segment over the past 12-months, but Mitrevski believes the company will avoid the same fate.
“It's a bit of a public-private market at the moment; we're not listed, but the companies that are listed on the public exchanges, they're definitely taking a hit,” Mitrevski said.
“For us, the ability to actually have a more closed, meaningful dialogue with our investors directly, as opposed to having to convince the public was, in this instance, probably to our advantage.
“Whereas I know that once you go public, it's a different ballgame, it's a different conversation that you're trying to promote and have.
Mitrevski believes investors still see BNPL fundamentals as strong, in a win, win market where merchants get higher average order volumes, and the customer receives credit.
The company is currently present in the markets of Italy, Germany, France, Spain, Portugal, Austria, Belgium, the Netherlands and Finland. Scalapay currently works with major international merchants and retailers including Shein, Decathlon, Calzedonia, Morgandetoi (Beaumanoir Group), Swappie, Moschino, Don't Call Me Jennifer, Samsonite, Nike, and Pandora, among others
"Scalapay is a brilliant solution that matches an elegant merchant solution with a simple but powerful user experience," says Amit Jhawar, one of the company's new board members who is the former CEO of Venmo, and a former COO and CFO at Braintree.
"I knew Scalapay was a winner when I saw the merchant and consumer experiences that perfectly delivered value to both sides of the two-sided network in Southern Europe."
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