Payments
In search of the next Klarna
Last updated: 14 Oct 2021
Market 101
Payments companies are supplying the invisible infrastructure without which no one could buy anything anywhere in the world. Startups are cooking up ideas to allow consumers to pay in more innovative ways, and are helping more companies cash in on the rise of contactless and online payments. They’re challenging the incumbents, head-on, while inspiring others to upgrade or integrate new services.
Thanks to them, we’ve grown used to paying in installments or with QR codes. In the future, we may instead access portions of our salary right away, or leave the store without tapping our cards or phones. What now seems like wizardry will soon feel mundane.
Early stage market map
Key facts
€289bn
EMEA payments market size in 20201
75%
of all Mastercard transactions across Europe that are now contactless as of March 20202
30%
of e-commerce spend using buy now pay later (BNPL) options by 20253
Trends to watch
1. Consumer adoption
→ Open banking payments offer the possibility for faster, cheaper and safer transactions for merchants.
→ Now, the challenge is to get consumers to know about it, then embrace it. Startups are using rewards and exclusive partnerships to sweeten the deal.
2. Here today, gone tomorrow
→ European BNPL companies could soon see an end to their nearmonopolies in their home countries, as big international players are set to expand into Europe.
→ In response, a new wave of startups are offering BNPL solutions in underserved areas like the B2B market, where they face less competition for now.
3. Tapping into a growing market
→ SMEs are still struggling to adjust to the alternative payments world, and many have not yet been onboarded.
→ Startups are hoping to win them over by tailoring their services to particular niches, and experimenting with subscription models instead of transaction fees.
4. Ready, set, acquire
→ When it comes to their smaller but growing rivals, payments incumbents are not holding their breath.
→ PayPal, Mastercard and Visa have all been making acquisitions and will likely continue as long as their startup competition shows no sign of waning.
Startups tracked by Sifted
Sifted take
Payments startups’ true test is whether they can hold their own against incumbents when they have been all too comfortable snapping up their smaller rivals. Should this M&A trend continue in the sector, the ways in which we pay may change, but the dominant players will stay the same.
Rising stars
Offers an end-to-end payment solution for merchants, from creating an account to analysing data post-checkout. Its cofounders all have backgrounds in ecommerce and fintech, and met while working at Klarna.
Round
Seed
Valuation
€10m
Date
2020
Size
€2m
Offers an account-to-account payment software that charges 0.1% to process payments, which are transferred in near real-time. Cofounder Brad Goodall previously cofounded 10x Banking, a banking startup that has raised €59m and employs close to 300 people.
Round
Seed
Valuation
€14m
Date
2020
Size
€2.8m
Offers a BNPL plugin specifically for B2B shopping. Its cofounders include Andreas Mjelde, who previously raised €210m for the marketplace startup Linio, and several former strategy consultants.
Round
Seed
Valuation
€12.5m
Date
2021
Size
€2.5m
Early stage startups to watch
Bottlepay
Crypto payments
€15m
€13m
-
Bridge
Payment orchestration
€3m
€3m
-
Briqpay
E-commerce payments
€2m
€2m
-
Dintero
E-commerce payments
€1.2m
€200k
-
Fintecture
Account-to-account payments
€6.8m
€6.8m
-
Joe
BNPL
€1m
€1m
-
Payaut
Fintech
€11.4m
€7.8m
-
payvyne
Account-to-account payments
€13.2m
€13.2m
-
Phos Cloud
Point of sale payments
€3m
€2m
-
Playter Pay
BNPL
€1.2m
€1.2m
-
Ready2order
Point of sale payments
€5m
€5m
-
Sprinque
€1.8m
€1.7m
-
Tillit Finance
BNPL
€2.5m
€2.5m
-
Trilo
Account-to-account payments
€1.2m
€900k
-
Trisbee
Point of sale payments
€877k
€500k
-
WyzePay
E-commerce payments
€460k
€460k
-
Yavin
Point of sale payments
€1.2m
€1.2m
-
Europe’s success stories
Who early stage startups are up against
(Pre-)Seed
Series A
Series B
Series C
Series D+
IPO/Exit
→ Processed over €300bn worth of payments in 2020, primarily from large, international merchants, both online and through in-store POS offering
→ Current market cap of €65bn (IPO’d in 2018)
(Pre-)Seed
Series A
Series B
Series C
Series D+
IPO/Exit
→ Younger competitor to Adyen, focusing more on mid-market merchants, rapid growth and acquisitions
→ Tripled its payment processing volumes in 2020 compared to 2019
(Pre-)Seed
Series A
Series B
Series C
Series D+
IPO/Exit
→ Europe’s leading BNPL provider, which has since successfully expanded to the US
→ Following its latest funding round, the company is now the world’s second most valuable fintech at a $45.6bn postmoney valuation
Sources
Research reports
World Payments Report 2021 | October 2021 | Capgemini
1 Global Payments Report 2021 | October 2021 | McKinsey
Global Payments 2021: All in for Growth | October 2021 | BCG
News articles
Neobanks gamble with buy-now pay-later — but will it make them money? | September 2021 | Sifted
Buy Now Pay Later fintechs won’t kill credit cards that easily | June 2021 | Sifted
Can these payment startups rival Mastercard and Visa? Investors think so | June 2021 | Sifted
Inside the open banking hype bubble | April 2021 | Sifted
The Buy Now Pay Later "wars": Meet Klarna's rivals in Europe | January 2021 | Sifted
2 Mastercard enables Contactless limit raise across 29 countries; and champions permanent increase | March 2020 | MasterCard
Market research
3 Digital BNPL & ePOS Financing: Market Outlook 2020 | September 2020 | Kaleido Intelligence
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