Butter, a London-based fintech platform born with the idea of the UK’s first Buy Now Pay Later (BNPL) travel agency, has just closed a £15.8 million funding round.
Founded in 2017 by Timothy Davis, Stefan Hobl and Nik Haukohl, the startup has raised funds via BCI Finance, the credit arm of London-based venture builder Blenheim Chalcot, as well as a number of other private Angel investors in order to expand Butter’s offering.
The funds will be used to accelerate the rollout of its responsible open-banking based BNPL shopping app. Currently, the startup has 20 team members and they has aggressive plans to grow.
Timothy Davis, Co-Founder and CEO of Butter, informed UKTN: “We’ve already established an incredible core team which we view as a fundamental requirement when building a great business. However, this latest raise will allow us to add even more outstanding people to the business to help achieve our ambitions within the buy now pay later sector. In addition, it give us the financial foundation required to further expand the platform with the rapid scale of our customer base also an immediate area of focus.”
Paul Maurici, Investment Manager at BCI, commented: “Our mission at BCI is to be the funder of choice for UK Fintech’s looking to scale. Butter is a young and ambitious company, which combines a tech-enabled approach to lending alongside impressive customer delivery capabilities.
With its FCA authorisation already in place, the business is well placed to continue strong growth while assisting its customers in managing their money better.”
How was Butter born?
Irritated by the lack of flexible payment options whilst planning a holiday, co-founder Timothy Davis was inspired to build the UK’s first buy now pay later travel agency, enabling travellers to spread the cost of travel arrangements over time, with full payment not due until after the trip.
Together with co-founders Stefan Hobl and Nik Haukohl, Butter achieved full FCA regulated status in 2017, and 4 years later, Butter has evolved into a British fintech platform with over 100,000 customers, offering instalments across every consumer vertical and flying the flag against other sector giants such as Klarna.
When the pandemic brought the travel and tourism industry to a grinding halt two years later, Butter pivoted by launching the UK’s first BNPL shopping app alongside their travel offering, enabling customers to spread the cost of any purchase from any online store.
Unlike other BNPL providers, Butter claims to be unique with its “over-the-top” (OTT) solution — enables customers to spread the cost of purchases with every store on the internet, without requiring merchants to support Butter via a technical integration. Instead, Butter’s in-app universal checkout takes care of paying retailers, with customers then able to repay the costs over 2, 3, or 4 monthly payments.
Popular stores in the Butter app include Amazon, Argos, BooHoo, ASOS, H&M, Zara, Hugo Boss, Sports Direct, AirBnB, Currys PC World, Ao.com, IKEA and more.
As the UK’s first FCA regulated BNPL provider, the Klarna rival has successfully developed a unique credit decisioning process with affordability at its core, utilising open banking and machine learning to ensure that lending is responsible and that customers are only able to borrow amounts based on what they can afford.