Brazilian-based buy now, pay later (BNPL) startup TruePay on Tuesday (Nov. 23) announced that it recently wrapped up a Series A funding round that brought in $32 million, which will largely be used to hire more employees for the fledgling company, according to a company press release.
Addition led TruePay’s latest fundraising effort, which comes three months after the company snagged $8.5 million in a seed round co-led by Kaszek and Monashees that also included participation from ONEVC and Global Founders Capital.
TruePay says it has a client base “in the thousands” five months after its launch, has seen growth between 100%-200% per month, and expects growth “ten- to fifteen-fold” in 2022, per a TechCrunch report.
“We are very happy to have the trust of some of the best investors in the world as well as the super-talented people that we were able to bring on board. A raise like this is a symbol of the impact TruePay will make in the market by delivering free credit to millions of merchants in Brazil,” said Pedro Oliveira, CEO and co-founder of TruePay, in the announcement.
The company attempts to turn retailers’ credit card receivables into purchasing power in a move that company leaders say will guarantee payment to the supplier.
Brazilian retailers face long average receiving terms and short payment terms, said Co-founder Luis Eduardo Cascão. “These companies bear the country’s economy on their shoulders, but don’t have any source of capital at a minimally fair cost to address this gap,” he told TechCrunch. “Therefore, they end up resorting to other solutions, such as factoring receivables at high rates with payment processing companies and seeking credit at abusive interest rates from banks.
“The suppliers of these retailers, in turn, often end up having to choose between not selling or extending them credit, running the risk of default, which they are usually unequipped to do — resulting in a negative credit cycle,” he continued. “TruePay was created precisely to break this negative spiral and transform the relationship into a flywheel.”
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Gary Rohloff, Laybuy’s co-founder and managing director, said one of the reasons BNPL has exploded is because most young people don’t want credit cards, and installment payments represent “an opportunity for them to buy the things they want or need without the requirement for a credit card and a higher interest rate.”