While buy now, pay later startups have mostly focused on the consumer, a growing group of them are now focusing on the B2B space.
Businesses need more flexible payment options.
In December, Affirm spinout Resolve, which specializes in "buy now, pay later" capabilities for B2B transactions, announced that it had raised $25 million in equity funding. A $100 million Series C funding round was closed by Berlin-based Billie. In Latin America, TruePay, a one-year-old startup, raised $32 million in a Series A financing.
Vartana is a startup that wants to be the "Affirm for B2B." Affirm was one of the earliest players in the consumer sector.
According to CEO Kush Kella, the company name was chosen because it is the Sanskrit word for financial well-being. The startup is emerging from stealth with $7 million in equity funding and $50 million in credit.
The co-founders say they are building a buy now, pay later and checkout platform for business purchases.
The inefficiencies in the process and the time it took to complete a transaction helped us realize that you can digitize the entire process rather than relying on email and manual paperwork. The same level of flexibility Affirm has brought to consumers to businesses is what we want to bring to businesses.
Mid- to late-stage technology companies are Vartana's target customers. After seeing transaction volume grow by 100% quarter over quarter, the company is launching to the public. It works by pre-approving customers in the sales funnel. The company says customers can choose their preferred payment options and complete transactions within minutes.
A business is trying to purchase 50 licenses. The business would want to be charged $50,000. Some companies don't have the extra cash to take out a loan, so they may want to spread out their payments. Salesforce is not a Vartana user. The terms are from 12 to 60 months.
Kella said that many businesses don't have the budget to pay for that kind of thing upfront.
Credit card and payments companies compete for market share.
The B2B BNPL space is not a winner in all scenarios. There is room for a lot of startup, targeting different types of businesses. Kella noted that Resolve focuses on marketplace and e-commerce transactions where buyers are looking to get relatively shorter payment terms in a self-service fashion. The technology sales market is where sellers and buyers need to collaborate to complete the purchase and buyers need financing of more than a year to purchase software or hardware.
Kella, who was a founding engineer at KeepTruckin, said that their technology is focused on helping buyers and sellers collaborate and deal with more complex transactions. We focus on businesses trying to acquire a technology product that could cost between $10,000 and $1 million.
The seller of the tech product is charged a fee by Vartana. In some cases, sellers will pass on the fee to the buyers.
The image is from Vartana.
i80 Group provided the credit for the equity portion of the financing. Shoaib Makani, the CEO and co- founder of KeepTruckin, is a partner at Flex Capital, as is Joe Kraus, the CEO and co- founder of Rubric.
Vartana plans to use its equity funding to add more staff to work on its product plan.
According to Nakul Mandan, founder and partner at Audacious, every enterprise business his firm has invested in cares about cash flow and getting paid upfront from their customers, but also benefits in sales velocity by giving better payment terms to its customers.
He believes that Vartana is relevant to almost every B2B company because it is an elegant solution.
Mandan was particularly impressed by the team's vision of building an "end to end checkout solution that combines tech, customer financing and closing process management for an enterprise sales team." The company's closing process management and collections offering integrates within a sales reps' existing tech stack.
He said it was aholistic approach to solve what sales reps needed to get their customers to quickly close deals.
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