Zaver, a Swedish fintech that enables merchants to accept cardless payments and offer buy-now-pay-later (BNPL) as an option, has raised $5 million in new funding.
The company, which began life focused on P2P payments for marketplace transactions, is now doubling down on the durables sector (think: automotive, health & beauty, craftmanship, etc.) for both online and offline commerce, after claiming to have found product-market fit.
Backing Zaver's new round are VCs Inbox Capital (the firm that has invested in the likes of Revolut and Klarna) and Inventure. Other investors include Fredrik Österberg (founder of Evolution Gaming), Magnus Rausing (angel investor), Joen Bonnier (partner at Atomico), Fabian Hielte and Max Hobohm and Johannes Hobohm (owners of Ernstrom).
Founded by Amir Marandi and Linus Malmén in mid 2016, while both were students at the KTH Royal Institute of Technology in Stockholm, Zaver wants to accelerate the move away from plastic cards to mobile payments. Its target market is "durables," starting in Sweden. Payments functionality and features include online and offline cardless payments powered by open banking, instant payouts for merchants, BNPL and credit scoring.
"By durables, we mean goods (and services) that do not need to be purchased often, and typically last for a longer period of time e.g. automotive, a visit to the dentist clinic or kitchen renovation," Marandi tells me. "[These] are often higher transaction value than 'common' retail products or services".
Since the launch of "Zaver for Business" two years ago, Marandi says the company has gone from zero to "hundreds of millions of dollars" in processing volume. “Today, we have a product-market fit proving that the users are willing to leave old habits, and instead use their phone in order to pay for even larger items or services," he says.
Through bypassing the card rails, Marandi argues that Zaver is able to customize pricing, user experience and product development in-house, in a way that wasn't possible until now. "The focus is on replacing legacy-solutions with a comprehensive banking and payments platform for SMEs in this sector, where BNPL plays a key role in the transition in customer behaviour," he adds.
Meanwhile, Zaver's main competitors are cited as legacy products, such as credit cards and factoring companies. "What makes us different is that we focus on the shift to mobile payments in a sector with low margin sales, and high average transaction values," says Marandi. "By focusing on new customer behaviours (e.g. BNPL, direct debit, instalments at point-of-sale) and real-time settlements, we can offer the same frictionless payment experience online and offline, no matter the size of the tickets".