ALMA
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Alma raises $59.4 million for its Klarna-like payment option
French startup Alma is raising a $59.4 million Series B funding round (€49 million). The company has been building a new payment option for expensive goods. You can choose to pay over three or four installments. This product sounds familiar if you’ve used Klarna in the past. But Klarna isn’t available in France.
Cathay Innovation, Idinvest, Bpifrance’s Large Venture fund, Seaya Ventures and Picus Capital are participating in today’s funding round. In addition to today’s equity round, Alma is raising a credit line of $25.5 million (€21 million) to finance merchant payments.
What makes Alma attractive to merchants is that the startup is handling 100% of the risk involved with a payment over multiple installments. When a customer buys a bike over four installments, they’ll get charged over several months. But the merchant gets paid on day one.
Since I first covered Alma, the startup has launched the ability to pay later. You enter your card information right now but you get charged 15 days or a month later. It can be particularly useful if you’re unsure about something you’re buying and if you think there’s a chance you’ll send it back.
And it’s an attractive option in France where debit cards are the norm — not credit cards. Alma also plans to offer longer plans, such as the ability to buy now and pay over 6, 10 or 12 installments.
Thanks to the new influx of cash, the startup plans to triple the size of its team and reach €1 billion in annual payment volume within two years. It’s also going to expand to other countries, but with a specific focus on helping French merchants reach European customers living in other European countries.
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Alma is a Klarna-like payment startup that lets you buy now and pay later
Meet Alma, a French startup that helps you offer a new payment option for your expensive goods. Like Klarna, clients can choose to pay over three or four installments. But the comparison stops here, as Klarna isn’t available in France. Alma just raised a $14.1 million (€12.5 million) funding round.
Idinvest, ISAI and Picus Capital are investing in today’s funding round. Additionally, Alma has opened a $19.2 million (€17 million) credit line to finance merchant payments.
As a merchant, when you integrate Alma in your payment flow, your customers can choose Alma to make it less intimidating. Instead of getting charged when you pay, you can choose to buy now and pay over three or four installments. Merchants get paid instantly.
“We handle risk and cash advance in house,” co-founder and CEO Louis Chatriot told me. “When it comes to the risk of non-payment, we have implemented a series of verifications, filters and algorithms in order to detect fraud and high-risk profiles.”
The company creates multiple categories depending on your profile. It can ask for more information if Alma has some doubts, such as API access to your bank statement. Assessing risk is particularly difficult in France, as there’s no central credit scoring system.
Merchants can choose to pay the processing fees in full — 3.8% of the transaction for a payment in three intallments, 4.2% for a payment in four installments. But they also can share the processing fees with the end customer.
Alma is compatible with most e-commerce platforms, such as Shopify, Magento and Prestashop. Merchants can also offer Alma as a payment option in retail stores.
Over 1,000 merchants are using Alma already — the startup processes tens of millions of euros of transactions per year. Clients include Bobbies, Asphalte, Cowboy, Weebot, The Cool Republic and The Socialite Family.
With today’s funding round, the company wants to attract more merchants and launch two new payment options — pay later and a more traditional option to pay now. In addition to that, Alma currently redirects customers to its own checkout page. The startup wants to integrate its payment widget directly on e-commerce websites.
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