Italian job: Buy now pay later challenger Scalapay raises $63 million

Australian buy-now, pay-later players are setting their sights globally, with Afterpay challenger Scalapay raising $US48 million ($63 million) to fund its European expansion.

Co-founders Simone Mancini, 32, and Johnny Mitrevski, 43, developed Scalapay when they met in Australia working for Prospa and the Commonwealth Bank of Australia, but decided to launch Scalapay’s product in Italy in 2019 after identifying a gap in the market there for a BNPL provider.

“When we saw Italy it was just a burning flag for us because it’s got 10 times the retail trade that we do here in Australia,” Wollongong-based Mr Mitrevski said. “At that point in time two years ago there really wasn’t a significant buy-now, pay-later player, so we really came into almost like a blue ocean.”

Scalapay co-founders Simone Mancini and Johnny Mitrevski.
Scalapay co-founders Simone Mancini and Johnny Mitrevski.

Scalapay’s product enables customers to pay off purchases in three instalments, similar to other BNPL providers, but Mr Mitrevski said the Australian market was too saturated with most e-commerce retailers already offering three or four different BNPL options.

Advertisement

“That number is significantly growing and really being able to really make a significant impact in Australia is a lot more challenging than it would be to go to a place where, for instance, the market is still quite open,” he said. “I do feel that in Australia, it’s a little bit, you know the game has been won and we all know who won it.”

The industry has had a meteoric rise in Australia, lead by $39 billion juggernaut Afterpay with competitors including CBA-backed Klarna, Flexigroup, Latitude, Openpay, Payright, Sezzle, Splitit, Layby and Limepay.

Mr Mitrevski said Scalapay was already the most popular BNPL company in Italy and was used by more than 1000 merchants across France, Italy and Germany, with its customers including sports retailer Decathlon and shoe retailer Bata.

‘Almost second nature’

Scalapay’s seed round announced on Friday was led by Italian investor Fasanara Capital alongside US investor Baleen Capital, which is also an investor in Afterpay, and Italian family office Ithaca Investments.

Mr Mitrevski declined to reveal Scalapay’s market value but said the startup would use the funding to hire 50 new software engineering roles in Australia and expand its product across Europe and the US.

“Buy-now, pay-later here in Australia is almost second nature, we know about it so much, we talk about it so much, it’s a really hot topic, the reality is in other parts of the world – in particular southern Europe – it’s still quite new,” he said.

Mr Mitrevski said Scalapay’s new products which it aimed to bring to market later in the year would expand beyond BNPL.

“The goal of the company isn’t so much about buy-now, pay-later as a payment method,” he said. “It’s really about solving problems for the merchants, as well as creating great customer experiences.”

Francesco Filia, chief executive of Fasanara Capital, said he was impressed with the fast growth of Scalapay and its underlying business model.

“They have shown resilience during a difficult period and I’m excited by where the company is headed,” he said.

Most Viewed in Business

Source: Thanks smh.com