Today Skeps, the Point-of-Sale technology firm, announced that Bertelsmann India Investments participated in its $9.5 million Series A funding round, alongside existing investor Accel. Skeps provides a buy now pay later (BNPL) lending solution that uses an enterprise blockchain to create a decentralized loan marketplace.
“Skeps is the most innovative point-of-sale financing solution we have come across over the past few years,” said Rohit Sood, Partner at Bertelsmann India Investments.
In the past 18 months, Skeps has powered more than $1 billion in loan evaluations and claims to have an 80% approval rate. It effectively provides a decentralized match-making solution between merchants and lenders or banks.
All types of merchants are catered for, but it has particularly targeted home improvements, likely because of the relatively high ticket value. Integration is simple and merchants can track the effectiveness throughout the sales funnel. Skeps claims it increases conversion rates by 44%, and the average transaction is 15% larger.
On the banking side, Skeps says it enables banks to compete with fintechs for BNPL. It’s a hot sector, with Square acquiring Australia’s Afterpay for $29 billion earlier this month. U.S.-based Affirm was listed on Nasdaq in January and currently has a market capitalization of $25 billion. Affirm’s stock price shot up more than 30% this week after Amazon announced a deal with the company.
Even though Skeps has built-in connectivity for banking systems, it still has to be integrated with fraud, KYC, risk, and origination systems.
Various other lending solutions are using blockchain, especially for trade finance, mortgages and bonds. Spain has been a hotbed of activity, with BBVA bank trialing a variety of loans. The Spanish stock exchange BME is working on a blockchain solution to tokenize participatory loans and convertible notes issued by SMEs.