This startup offers Klarna-style buy now, pay later options for B2B transactions. Check out the 19-slide pitch deck Hokodo used to raise $40 million.

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  • London-based fintech Hokodo has raised $40 million in Series B funding.
  • The startup offers buy now, pay later products for business-to-business transactions.
  • Check out the 19-slide pitch deck Hokodo used to raise the funds below.

A startup that offers a “Klarna-style” buy now, pay later option for business-to-business transactions has raised $40 million in fresh funds.

London-based Hokodo, which was founded in 2018, offers SMEs and e-commerce firms credit to pay for purchases from other companies. It differs from trade credit, a more traditional form of supply chain finance where repayment comes in a set window following a purchase, usually 30, 60, or 90 days.

The buy now, pay later market has been dominated by consumer products to date with the likes of Klarna and Affirm offering short-term financing at checkouts. In addition, Apple unveiled its own buy now, pay later product earlier this month.

Hokodo believes the increased shift of B2B trade online has created the need for a corporate buy now, pay later option. The startup enables sellers to offer credit at their checkout while its API carries out processes like credit decisions and fraud detection.

Unlike in the consumer space, where the market has undergone recent difficulties, the B2B industry has been booming with a number of funding rounds taking place in recent years, including a round for fellow UK fintech Playter.

“We are fortunate to be working with a group of investors who understand the potential of our business and the sheer capability gap between Hokodo and the competition,” Louis Carbonnier, Hokodo cofounder and CEO told Insider.

“For this reason, their support of us hasn’t been impacted by the recent downturn in the market. All in all, the fundraise was a relatively smooth process, but, sadly, I think that won’t be the case for many startups who need to start a raise in the next year or two.”

Funding comes from Notion Capital alongside European investors Korelya Capital, Mundi Ventures, and Opera Tech Ventures. Hokodo previously raised funding from firms including Mosaic, Anthemis, and Wise cofounder Taavet Hinrikus. 

“Some of the stories we’re seeing in the news about B2C BNPL firms like Klarna and Zip are really sad,” Sami Ben Hatit, Hokodo’s cofounder and CTO, said.

“It might look like the buy now, pay later bubble is about to burst, but the news of Apple just recently launching a pay later solution suggests that there is still demand among consumers for deferred payment options, as long as they’re done right and by trustworthy providers.”

Hatit said that the B2B buy now, pay later sector was “just getting started” and that while its solution was similar “in theory” to Klarna there were many key differences. “Most important of those differences is that B2B BNPL does not encourage overspending or facilitate debt among users,” he said.

Hokodo will use the fresh funds to expand into more European markets while developing new products, including buy now, pay later solutions for telesales and in-store purchases. The fintech currently has around 85 staff and will grow to 180 employees by mid-2023, Carbonnier added. 

Check out Hokodo’s pitch deck below: