Kontempo , a US-based startup offering BNPL, has raised a USD 30 million seed round in a mix of equity (USD 6. 5 million) and debt (USD 25 million).

To date, the company has raised USD 32. 5 million in venture capital. Portage led the seed round with participation from Scor P&C Ventures, Upper90 (who also provided the credit facility), Ignia, Tectonic Ventures, and Asymmetric Capital Partners.

The new cash will be used to hire staff, grow Kontempo’s merchant network, and further develop the technology underlying its platform. Kontempo plans to double its 11-person workforce by the end of 2022. Kontempo allows sales teams to approve credit for offline or online purchases with net terms of 30, 60, or 90 days.

Alternatively, or in addition, enterprises can use Kontempo’s application programming interface (API) to deploy a Buy Now, Pay Later (BNPL) option at checkout that doesn’t require a credit card or bank account information. To mitigate risk, Kontempo captures data from merchant partners to feed an algorithm that determines creditworthiness. The algorithm – which considers a range of factors – allows Kontempo to reach a broader segment of small and medium-sized enterprises (SMEs) that are typically rejected for credit.

What’s Kontempo offering? Kontempo aims, with its BNPL product, to increase the use of digital payments in the business-to-business (B2B) space, boost sales for both online and offline distributors and suppliers to SMEs, and build payments infrastructure for the B2B ecommerce market. According to TechCrunch, the question is whether there’s an interest in B2B for the products that Kontempo’s selling. To some extent, invoice factoring platforms solve the problem Kontempo purports to solve – guaranteeing payments – by providing a cash advance to suppliers.

With invoice factoring, a supplier sells its unpaid invoices to a factoring company (for a fee) and receives an advance in return (usually around 90%), while the remaining value is paid by the factoring company to the supplier once the buyer pays the invoice (plus a fee) to the factoring company. The difference, as the company officials mentioned, is that factoring doesn’t provide the instant, point-of-sale (POS) financing that BNPL can. Buy Now, Pay Later market BNPL has gotten a lot of play in the consumer market, installment-based payment plans have been slower to penetrate the traditionally conservative enterprise.

While most B2B purchases and procurements are spread out over time (e. g, net 30-day terms), the deals aren’t structured in the way consumer-style BNPL plans typically are. High processing fees are frequently involved, with 35% of businesses in an Ardent Partners survey reporting that it costs USD 8 to process a single supplier payment.

In fact, while consumer-focused BNPL startups have seen their valuations slashed and stock prices plummet in recent months, B2B BNPL is taking more and more space. According to company officials, most companies selling to small and medium-sized (SMBs) businesses need to offer point of sale financing, or ‘net terms,’ to be competitive. Moreover, there are currently no viable options to outsource this function.

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