Buy now, pay later (BNPL) startup Tymit has raised £23m in a Series A round led by the Mike Ashley-founded firm Frasers Group.
Founded in 2017, Tymit lets merchants it partners with offer customers installment payment options.
“With this investment, we can expand our operations, bring new partners on board, and continue to help merchants meet customer needs and drive growth,” said Martin Magnone, CEO and co-founder of Tymit.
“The credit providers and banks who dominate our wallets built their products for the bottom line, not for consumers or merchants. High merchant fees of 2-8% might be good for profits, but they hamper merchant growth. This has to stop.”
The new funding will be used to accelerate product development as well as support the launch of what the company calls a ‘B2B2C’ installment programme, wherein merchants can offer BNPL options to customers under their own brand.
A spokesperson for Frasers Group said: “This strategic investment into Tymit will allow the Group the ability to continue to pioneer the retail sector and later expand into the buy now, pay later market – enhancing the consumer experience and providing flexibility across the board.”
The BNPL model of payments has become a popular option for those with limited cash. While BNPL does give consumers more flexibility in their payment options, there are also concerns that users may not understand the financial ramifications of using what is essentially a loan.
The government and regulators are currently working on implementing clearer regulation of BNPL products. The Financial Conduct Authority (FCA) has previously warned BNPL firms over misleading promotions.
Tymit previously raised £4m in a funding round in November 2019.