French startup Alma is trying to build a new “buy now, pay later” giant in Europe. The company has closed a $130 million Series C round (€115 million). It has also raised $109 million (€95 million) in debt financing.
Tencent, GR Capital and Roosh Ventures are investing in the startup for the first time. Some of the startup’s existing investors are investing once again, such as Cathay Innovation, Eurazeo, Bpifrance’s Large Venture fund, Seaya Ventures and Picus Capital. Overall, it has raised $211 million (€185 million) in traditional equity funding rounds.
The company has partnered with 6,000 merchants so that they offer more flexibility for expensive purchases. The main payment product is the option to pay in two, three or four installments.
But the company also offers different plans. For instance, Alma offers 10-month or 12-month plans. Those options are particularly popular with some specific purchases, such as consumer electronics devices or furniture.
Finally, Alma has a payment option that lets you buy something and pay 15 or 30 days later. This could be particularly useful for clothing items and other goods that you think you might like, but you might end up returning.
Overall, Alma processes more than €1 billion annually with its current run rate. It doesn’t charge late payment fees, as the company thinks it isn’t aligned with consumers’ interests. Some companies, such as PayPal, have dropped late fees on BNPL installments. Others generate some revenue from those late interests.
Instead, Alma charges payment processing fees. Some merchants choose to pay those fees directly, hoping that it’ll increase sales. Other merchants share those fees with the end customers. It’s up to the merchant.
Alma is following in Klarna’s footsteps and has launched a mobile app for consumers. For now, the app only lets you manage your payments. At some point during the first half of 2022, the company will let you generate virtual cards to pay in multiple installments everywhere.
In addition to online payments, consumers can pay with Alma in retail stores. The payment option can be integrated in the payment terminals, or merchants can generate a payment link and share it with customers. In-store payments represent 30% of payment volume.
The startup works with Alain Afflelou, Etam, Galeries Lafayette, Printemps and Ankorstore. The company recently expanded to other markets. It is now available in Spain, Italy, Germany and Belgium. And Alma now plans to expand to the Netherlands, Luxembourg, Portugal, Ireland and Austria. In other words, Alma has refined its product — it’s now time to expand more widely.