UK fintech refused to ‘put the brakes on in times of significant headwinds’ for travel
Fly Now Pay Later completes $75 million funding deal to spur US growth
UK alternative payments provider Fly Now Pay Later has completed a $75 million debt funding package taking the total it has raised to $150 million in debt and equity funding.
Founded in 2015 by Jasper Dykes the firm expects Buy Now Pay Later (BNPL) will account for more than 50% of the embedded finance market by 2026.
The latest funding comes as Fly Now Pay Later targets growth in the US, the world’s largest travel market, as it anticipates a significant post-COVID return for travel this year.
The latest debt package is provided by funds managed by New York-based financier Atalaya Capital Management which has also provided an equity investment into the business.
It builds on the £45M of new investment made in the previous two equity funding rounds.
Chief executive Dykes said: “To have secured another landmark amount during one of the worst slow downs in travel history after it ground to a halt is testament to the efforts of the whole team.
“The US, which we entered in 2020, purposely formed a big part of our resilience plan as domestic leisure travel has been less affected than in Europe. And will continue to be a key focus as we enter 2022.
“There’s always a temptation to put the brakes on in times of significant headwinds, but with consumer expectations continuing to shift from traditional lending towards alternative convenient digital experiences, we upheld our investment commitments into developing our technology and threw ourselves into bolstering our partnership network in the states, which is really gaining momentum.”
James Intermont, principal at Atalaya Capital Management, said: “Fly Now Pay Later has handled the past 24 months admirably. It’s a strong brand in a high growth mode, that’s well positioned to capture the buoyant category demand.
“We’re proud to support the company and its experienced management team as they continue to make life easier for travellers and merchants worldwide with its tech-enabled financial solutions.”
Fly Now Pay Later enables customers to spread the cost of a trip over up to 12 monthly instalments by partnering with leading travel merchants or directly to consumers through its Anywhere app.
In July, it signed a deal with Cross River Bank, the New Jersey-based financial services organisation and Banking-as-a-Service provider, to support growth internationally.
This coincided with a strategic UK and US link-up with ChargeAfter, a global network of BNPL and point-of-sale financing for merchants, making Fly Now Pay Later the first travel-centric instalment payment option available on the platform.
“It’s a particularly exciting time for the company. The category is experiencing tremendous growth and with that we also welcome the FCA’s recent decision to regulate the sector in the UK to facilitate its continuing maturity,” added Dykes.
“There are tens of thousands of people who have families around the world who need a frictionless way to finance their flights. By removing financial boundaries, we hope to reconnect people with their friends and families no matter where they are around the globe.
“Since launch, we have been on a mission to make travel more accessible and affordable for more people, by providing payment flexibility at the click of a button.
“Our proprietary platform has been designed to make instantaneous credit decisions – providing highly tailored and digestible payment options to consumers traditionally underserved by existing credit institutions.”
Use of BNPL nearly quadrupled in 2020, to £2.7 billion in transactions in the UK, with five million people using these products since the beginning of the coronavirus pandemic.
Analysts forecast that by 2026, spending via BNPL services is predicted to hit almost $51bn (£37bn) in the UK alone. BNPL accounted for 2.1%, about $97 billion, of all global e-commerce transactions in 2020, according to Worldpay.
The firm employs 90 staff in the UK, US and Latvia and is aiming to support each market over the next year in line with customer demand and as travel restrictions ease. It will recruit a further 250 personnel across the three territories in 2022.