Mondu raises €39.9M to tap the €186B market opportunity for B2B BNPL in Europe and the US

Berlin-based Mondu, a payment fintech company that provides a “Buy Now, Pay Later” (BNPL) solution for B2B merchants and marketplaces, announced on Monday that it has raised $43M (approximately €39.98M) in a Series A round of funding. 

The round was led by US-based venture capital fund Valar Ventures. To date, Mondu has raised $57M (approximately €52.99M).

Investors in this round

Founded by Peter Thiel, Andrew McCormack, and James Fitzgerald, Valar Ventures invests in high-margin, fast-growing financial technology companies that are pursuing huge market opportunities.

Andrew McCormack, Founding Partner of Valar Ventures, says, “BNPL for B2B sits at the intersection of three huge markets that are all in transition. The B2B payments market is immense, and its transition to digital has been accelerated over the past couple of years. The B2B e-commerce market is larger than B2C but is underserved by current offerings, and supply chain financing is a growing need, particularly for SMBs. Online transactions with financing options are limited. Mondu fixes all of these problems with its solution. It’s a game-changer.”

The round also saw participation from existing Seed investors FinTech Collective, Cherry Ventures, and tech entrepreneurs and senior executives from Klarna, Zalando, and SumUp, among others.

FinTech Collective is a VC firm that invests in entrepreneurs who are rewiring the way money moves through the world. Founded in 2012, the firm has deep experience investing across capital markets, wealth management, banking, lending, payments, insurance, and DeFi. The firm manages over $750M in regulatory assets and has invested in 77 portfolio companies.

Cherry Ventures is an early-stage VC firm led by a team of entrepreneurs with experience building fast-scaling companies such as Zalando and Spotify. The firm backs Europe’s boldest founders, usually as their first institutional investor, and supports them in their go-to-market strategy and the scaling of their businesses.

Capital utilisation

The proceeds from this round will help Mondu to scale its BNPL solutions by investing in its product and customer acquisition. Mondu also has plans to expand into more European countries later this year, starting with Austria this summer.

Mondu’s co-founder and co-CEO, Philipp Povel, says, “While B2B BNPL is behind the consumer BNPL market, we believe there is a $200B opportunity just in Europe and the US, which is bigger than the global consumer BNPL market. This Series A and the backing of our European and the US investors will support us to rapidly scale our product and customer reach ahead of further expansion in Europe later this year.”

The company is in the process of hiring senior and junior positions, including its tech, risk, sales, and operations teams. Earlier this year, Mondu appointed former Klarna Legal Director Miyu Lee as its Chief Legal Officer and General Counsel to build a dynamic and modern legal and compliance team to match Mondu’s ambitions.

Simplifying the financial lives of SMBs

Founded in August, 2021, by Malte Huffmann, Philipp Povel and Gil Danziger, Mondu is a B2B payment fintech company. It provides a “Buy Now, Pay Later” solution for B2B merchants and marketplaces, as well as payment terms in their online checkout.

Co-founder and co-CEO, Malte Huffmann, says, “The concept of BNPL isn’t new in the B2B world – offline business trade has enjoyed it for decades. But as more companies increasingly move to digital, the need for BNPL for B2B online will grow immensely. We are on the verge of a “digitalisation boom” and Mondu wants to be part of that revolution by driving innovation within the B2B payments space.”

Since October, 2021, the company claims to have focussed on creating a “highly attractive” product, growing its merchant customer base and the number of businesses it serves, and scaling its team.

With over 100 employees, Mondu has built a payment product that drives conversion rate and incremental sales for merchants, focussing on a frictionless checkout experience for business customers. The solution can be integrated with merchants and is accessible through APIs, plug-ins, and checkout widgets.

The company has developed risk management capabilities for high approval rates at checkout, with a low-risk cost. With high approval rates being a key metric for merchants, Mondu is able to provide rates of over 90 per cent. It has already served thousands of businesses through its solution and has signed merchant customers across industries, including beauty, cleaning, and manufacturing.