Kafene, a digital platform helping merchants offer flexible lease-to-own (LTO) financing options, has raised $18m in Series B funding.
The round was led by Third Prime and existing investors.
Kafene said its lease-to-own agreements are free of debt and structured in a way that is simple, consumer-friendly and transparent.
These agreements primarily serve the underbanked. Kafene highlighted that this is importance given that one-third of Americans have credit scores that limit their purchasing ability, particularly on necessary big-ticket items such as furniture, appliances, electronics, tires and other goods.
Therefore, the financing platform provides retailers with a way to reach more of these consumers than they would otherwise be able to, which can meaningfully add to their customer bases.
This round follows a Series A investment of $30m in 2021 that was co-led by Third Prime and Valar Ventures. Kafene will use the new capital to increase headcount to meet the demand from merchants and consumers for omni-channel, technology-enabled purchase options.
Neal Desai, chief executive officer at Kafene, said, “We’re extremely excited to be doubling down on partnering with merchants to offer more flexible ownership options precisely when they’re needed most, and right at a time in which others have retreated and tightened their credit boxes.
“Kafene continues to grow in scale and valuation, and we’re thrilled to have like minded investors who share our vision and belief that today presents a powerful opportunity to take our platform and relationships to the next level. We’re poised not just to take market share, but to significantly broaden the market. We’ve only just scratched the surface ”
Wes Barton, co-founder and managing partner, Third Prime, added, “We’re proud of the results to date from Kafene and its management team in building a superb platform with a next-gen underwriting model that delivers strong unit economics and is resilient in the face of economic headwinds.”
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