Equipifi, a Scottsdale software startup, has raised $12 million in series A financing to help the company scale up its Buy Now, Pay Later offerings for financial institutions.
The investment was led by Curql Collective, via its Curql Fund, and PHX Ventures, which invested in Equipifi’s $3 million seed fund last year.
Buy Now, Pay Later (BNPL) options have exploded in popularity during the pandemic thanks to boosted e-commerce activity. The biggest players in the BNPL space — including Affirm, AfterPay and Klarna — have ballooned to multi-billion dollar companies.
These major companies work with retailers to offer these delayed payment options directly to consumers, but Equipifi aims to catch those same customers by working directly with financial institutions, primarily credit unions.
"Consumers rely on their primary financial institution to know them and their financial goals. That's why even as BNPL has been seeing rapid adoption through third-party lenders, the majority of consumers still look to their trusted financial institutions for a better option,” Equipifi co-founder and CEO Bryce Deeney said in a statement. "Equipifi powers banks and credit unions to take their customers shopping, providing a single place to view, accept, and manage their BNPL plans on their existing online banking app."
Equipifi, named in January as an AZ Inno Startup to Watch, was formed last September, but has already grown to 21 employees. The company currently works out of AZ CoWork in Scottsdale, but may soon need its own space.
Equipifi said it will launch its software with its first financial partner “soon” with more to come. The company also said it is locked in as the BNPL provider for multiple institutions, which represent more than 750,000 customer debit cards.
The number of people using BNPL options at checkout is expected to grow dramatically in coming years, but its popularity has already inspired calls for greater regulation. BNPL options are most popular with young people and people with lower incomes and BNPL is not regulated as tightly as older payment options.
Still, some cracks have appeared in the BNPL space of late, considering Sweden-based Klarna said Monday it will lay off about 10% of its total global workforce of 6,500, CNBC reported.
Some investors in the space are expressing caution due to concerns about rising interest rates and issues with market liquidity, CNBC said.
