British fintech lands significant investment to support retailer acquisition
The UK’s leading interest-free-only credit partner, DivideBuy has secured over £60m of equity investment and debt financing from prominent private equity investors and UK banks.
The backing comes from Souter Investments, family investment office of Sir Brian Souter and Jon Moulton, through his family office and with committed and uncommitted debt facilities provided by Shawbrook and Paragon Bank.
It will enable DivideBuy to continue to develop market leading technology and leverage it as a lender. The investment supports the growth of DivideBuy’s retailer network, allowing many more consumers access to a transparent, flexible and easy way to spread the cost of their shopping using interest free credit.
The company has been disrupting the consumer credit industry by offering technological driven solutions and a fresh approach to lending, both driven by user experience. Underpinning the consumer journey is the fully automated underwriting and decisioning, unlike the traditional point of sale market, zero customer applications are passed for manual underwriting.
This automation is backed by market leading approval rates where appropriate approval decisions are offered to 96% of applications. The focus is not just on converting low risk credit applications, but also creating sector first products, such as a guarantor solution designed to allow consumers with an emerging credit profile the ability to spread the cost of their purchases.
Max Thowless-Reeves, co-founder and non-executive chairman of DivideBuy said: “This investment by leading private equity players and banks in DivideBuy reflects the value that our business model and technology creates for retailers and customers as well as our progress as an organisation.
“Allowing retailers to offer interest free credit to their customers is conceptually simple but in practice significantly complex. Over the last four years we have innovated and broken barriers; our technology seamlessly meshes with any retailer’s website and IT estate and their customers can enjoy interest free credit in seconds.”
By partnering with DivideBuy, retailers have experienced significantly improved conversion rates, increased basket value and reduced basket abandonment which helps to foster customer loyalty. Testament to the unique DivideBuy approach, retailers switching from competitors are typically seeing an increase of up to 70% on approvals and conversions.
Robert Flowers, co-founder and CEO of DivideBuy added: “Our business model works because we have taken a technology first approach to lending. We are in complete control over the experience our retail partners and consumers receive, something that can only be achieved by owning the full lending journey. Our adaptive lending technology assesses an individual’s risk profile and finds an approval solution that works for them. DivideBuy specialise in offering interest-free credit, we help retail partners develop strategy and tailor solutions that deliver.
“DivideBuy has one overarching goal; to make interest free credit easy and accessible to both retailers and consumers. Whether it be developing the application to work seamlessly with assistive technology, or giving consumers the flexibility to log in to their account to change a payment date. DivideBuy has focused on delivering technology and solutions that enhance the experience of our users and we will continue to do so.”
Calum Cusiter, investment director at Souter Investments said: “DivideBuy represents an exciting opportunity for Souter Investments to support a fast growing, and innovative fintech business with a highly backable and passionate management team. We look forward to working with Rob and his team during the next phase of growth.” Calum has joined the board following the transaction.
The system enables retailers to pick and choose which products they offer credit on with sales landing instantly in existing order systems. The DivideBuy integration updates retail partners’ inventory and links into warehouse management systems, meaning retailers do not need to change any of their normal operational practises. DivideBuy will continue to develop its product offering including enhancements to its offline solution, customer experience and innovative after care products.
