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The monumental rise of ‘Buy Now, Pay Later’ in UK and Europe

Image credits: Klarna

The meteoric rise of the ‘Buy Now Payer Later’ or BNPL model has been driven by the need for a more transparent and convenient alternative that can align with evolving global consumer preferences. In addition, the model witnessed immense growth during the pandemic as the prospect of delayed payment became more attractive in light of the financial uncertainty resulting from the spike in unemployment.

One of its leading players, Swedish fintech giant Klarna, founded in 2005, last week confirmed a new equity funding of $639 million (£453.03 million) led by SoftBank’s Vision Fund 2, with additional participation from existing investors Adit Ventures, Honeycomb Asset Management and WestCap Group.

Facilitating global growth

With this development, the company is now valued at $45.6 billion (£32.33 billion). The latest financing cements 16-year-old Klarna’s position as the highest-valued private fintech in Europe. According to Klarna CEO and founder Sebastian Siemiatkowski, the company has seen explosive growth in the US and plans to use its new capital in part to continue to grow there and globally.

According to Sebastian Siemiatkowski, Klarna will use the money to continue its rapid expansion plans in the US, with more than 18 million American consumers now using Klarna, up from 10 million at the end of last year’s third quarter.

The Swedish fintech is also making its mark in the booming e-commerce market in France, with the ambition of revolutionising the online shopping experience in the country.

“The French retail and payments landscape is one of the fastest evolving markets in the world, as consumers embrace digital payments and online shopping at record pace. This is an exciting time to launch in France and I believe Klarna can really make a difference to French consumers, making it easy to shop and pay in a way that suits them – allowing them to take control of their money and purchases with complete security, transparency, with no interest and no hassle,” Siemiatkowski had said earlier as they launched in France last week.

While Klarna strengthens its US and global portfolio, the trend seems to be growing in the UK and European market as well.


Image credits: Laybuy

Founders: Gary Rohloff

Funding: £18 million 

Founded Year: 2017

Based out of Auckland, New Zealand, Laybuy is a fintech company that provides buy now, pay later services partnering with over 9,000 retail merchants. Recently, it raised A$35 million (approx £24.7 million) from new and existing institutional investors to invest in technology, marketing, and hire people for its expansion in the UK market. The company has also confirmed its strategic partnerships with Rakuten, AWIN, and Sovrn, which will see its customers having access to over 5,000 merchants in the UK, including household brands ASOS, Nike, Marks & Spencer, Amazon, and eBay.  


Image credits: Hokodo

Founder: Richard Thornton, Louis Carbonnier and Sami Ben Hatit

Funding: £15 million

Founded Year: 2018

London and Paris-based B2B Buy Now Pay Later provider, Hokodo, provides B2B merchants with real-time trade credit solutions. It has recently raised funding in the Series A round to further develop its proprietary digital credit technology and extend its services across Europe, supporting the growth of the $12 trillion (approx £8.5 trillion) B2B commerce space. With Hokodo, merchants can offer payment terms instantly at the check-out, even on a customer’s first visit; and its merchants are guaranteed to get paid no matter what.


Image credits: Zilch

Founder: Philip Belamant and Serge Belamant

Funding: £94 million

Founded Year: 2018

The London-based Zilch’s unique over-the-top platform means they are merchant agnostic, and customers can tap to pay later wherever they want. It has introduced a feature that empowers customers to pay later with just a tap. Dubbed as Tap & Pay-over-time, this feature will allow customers to pay over time anywhere in-store with a tap in the UK and Europe.


Founder: Nick Molnar and Anthony Eisen

Founded Year: 2015

Manchester-based Clearpay, part of global instalments payments innovator Afterpay was launched as an interest-free, buy-now-pay-later alternative that is more in line with the needs and spending patterns of modern shoppers. To reignite British retail by welcoming consumers back to the shopping area, Clearpay launched a pop-up on London’s King Road in Chelsea to bring London Fashion Week to British consumers last week. The group also extended its reach to Southern Europe earlier in March this year with its ‘buy now, pay later’ payments service unveiled to merchants across Spain, France and Italy.

The service was launched initially with over 300 fashion, beauty and lifestyle brands across Spain, France and Italy. The move followed its acquisition of Pagantis, a Spanish-based payment company, and receiving regulatory approval from the Bank of Spain.

Purple Dot

Purple Dot

Founder: Madeline Parra and John Talbott

Funding: €1.49 million

Founded Year: 2019

The London-based startup is helping fashion brands tackle wasted inventory, drastic sales tactics, and the profit erosion that comes with it. Purple Dot allows consumers to request a ‘worth-the-wait’ lower price, and in return, retailers may then decide whether or not to release a product mid-season at a slightly reduced rate. The UK fintech company completed its first major partnership with SPOKE London, the online men’s trouser retailer, allowing SPOKE’s customer to pre-order a new style eight weeks before production.