Paylater Confirms its Transition into a Digital Bank Following $5m Funding Round
It’s been confirmed, Paylater is transitioning into a full-fledged digital bank.
One Finance, owner of the hugely popular Paylater app, has secured a $5 million loan from international lending platform, Lendable. This is the third time One Finance has recorded any funding according to CrunchBase. Importantly, this is the first round of funding since the company secured its first credit rating in December.
Excited to announce our partnership with @OneFiCo to help them scale @paylaterNG . @ngozidozie @ChijiokeD have built a co that understands its customers, constantly innovates product, and is filling a real market need. Just the beginning for us in Nigeria https://t.co/Pgk7blqBSY
— Lendable (@lendableinc) March 11, 2019
Following the deal, OneFi has finally confirmed the full transition of Paylater into a full-fledged digital bank.
Now, we have made several speculations that Paylater was on the verge of becoming a digital bank. The fintech platform has gradually and quietly been adding new features over the last few months. Last year, the app introduced PayVest, an investment feature promising 15.5% returns.
It also integrated payments features, allowing users to make transactions, pay bills and buy recharge cards.
It followed up this efforts by announcing new features in January 2019. One notable introduction was the creation of a savings account for female entrepreneurs. The feature is a subtle way of announcing savings account for users. And it gave a really clear hint about its ambitions for 2019.
Another new feature announced in January 2019 was debit cards for Paylater users. The cards will be paired with Paylater wallets and will allow users make withdrawals and other transactions from anywhere in the world.
Lendable exists to help innovative alternative lenders grow. We are excited to be working with @paylaterNG to help them reach more customers with bigger loans and better products. https://t.co/KwyEf1nPRl
— Lendable (@lendableinc) March 11, 2019
But as much as these were clear signs, they were all speculation. But now, three year old Paylater has finally confirmed its banking transition.
According to CEO of One Finance, Chijioke Dozie, the debt funding from Lendable will help usher in its transition to a digital bank.
“As we transition into a full service digital bank, this financing will allow us to execute on a number of new products,” he said.
“This includes our partnership with Visa, whereby we’ll be providing credit via QR codes at supermarkets, clinics and on public transport in H1 2019.”
The 'Paylater' name is changing, soon!
If you were to guess what the brand new name for our service is, what would you go with?🤔
Comment with your best idea, and why you chose that 👇🏽 pic.twitter.com/JBzs2MBobS
— Paylater (@paylaterNG) March 1, 2019
Added to this, Paylater has also announced a huge rebranding. According to One Finance, the rebranding will “better reflect our growth, who we are and our vision.”
The rebranding and subsequent digital banking experience will be announced by April 2019.
Despite the enthusiasm for its transition, Paylater has been shy of raising external funding. While other startups with less publicity and lesser growth have secured various degrees of funding, Paylater has steered clear of external funding. Out of four funding rounds (worth $15.8 million), two (worth $15m) have been debt financing.
Obviously the fintech is not so psyched about giving out equity to investors. But as it makes its banking transition, it will require greater funding for both its licensing needs and cost of operations.
