Tranch, a buy now, pay later (BNPL) platform for SaaS sellers, has raised £3.5million in pre-seed equity, while bagging a place on Y Combinator’s next startup accelerator programme.
London-based Tranch, founded in 2021 by Philip Kelvin and Beau Allison, combines credit risk modelling and open banking data to make BNPL payments more accessible to more B2B customers.
Led by Flash Ventures, with an additional debt facility from Columbia Lake Partners, the £3.5million funding round will be used for team expansion and a drive towards launching in the US. It will also support onboarding more suppliers across multiple verticals.
Tranch is also backed by Y Combinator and will join its next startup accelerator programme which comes with a $500,000 investment. More than 3600 companies have been through the YC programme since 2005, but only three per cent have come from the UK.
Pay with Tranch
Tranch enables companies to pay for expenses like SaaS, cloud hosting and professional fees, then spread the cost out over time. It says companies waste $20billion a year globally paying premium monthly fees for annual SaaS contracts that they could pay for upfront and in full if it wasn’t for cash flow constraints.
By offering a ‘Pay with Tranch’ payment method, suppliers can offer their end-customers a more flexible way to pay for contracts worth £10,000 to £250,000, while they themselves get paid upfront, faster. Businesses selecting Tranch to pay their large expenses can achieve greater control over their cash flow and boost their liquidity. Instead of settling invoices in full within a standard 30 to 90 day term, an end-customer that chooses ‘Pay with Tranch’ can spread the cost of their contracts over six to 12 months.
Philip Kelvin, co-founder & CEO of Tranch, says: “Tranch was born out of a frustration and desire to fix a broken model. My time as a scaleup CFO made me realise just how inflexible payment options can be for crucial SaaS tools and other business services, and how detrimental this lack of choice and payment ownership can be on thousands of companies.
“Pay with Tranch solves that huge and costly problem, by putting flexibility and choice at the heart of the payments process in a way that works simply and favourably for both suppliers and buyers.”
Following the investment, Yash Zaveri, partner & MD at Flash Ventures will join Tranch’s board. He adds: “B2B BNPL players so far have been largely focused on B2B e-commerce where ticket sizes are small and lenders rely on standard credit data to make limited credit decisions.
“We’re excited to see Tranch making B2B BNPL accessible to more complex lending demands involving larger volumes and longer durations, all of which creates a hugely scalable international market opportunity through their full lending tech stack.”