Yahoo Finance Jaguar and Porsche back pay-later app for car repairs
Porsche and Jaguar Land Rover have joined the "buy now, pay later" craze by investing in a start-up that promises to slash the upfront cost of car repairs.
The two carmakers have taken stakes in London-based Bumper, which divides the cost of aftermarket support and repairs into interest free monthly instalments, as part of a $12m (£9m) funding round.
Bumper works with 3,000 car dealers and car manufacturers to stagger consumer payments into six chunks so they do not have to take out payday loans or use credit cards. It says the average repair on its service costs £700.
The chief executive, James Jackson, said he started the business after "taking my old banger to get a service and ending up with a massive bill. I thought there had to be a better way".
Bumper receives commission for the sales it secures and claims to boost conversion rates for dealerships by reducing the initial payment from drivers.
The funding round was led by Silicon Valley-based Autotech Ventures, along with Germany’s Porsche Ventures and Jaguar Land Rover’s InMotion Ventures.
Once a niche way to pay for fast fashion goods, "buy now, pay later" companies have raised hundreds of millions of pounds as Generation Z consumers flock to the alternative form of credit.
Swedish juggernaut Klarna, founded in 2005, raised $639m this summer at a valuation of $45bn, while Australia’s Afterpay was acquired in August by US payments company Square in a $30bn deal.
It has prompted other sectors to look at the financing method. Several start-ups have launched ‘buy now, pay later’ offerings for business to business payments, while others have targeted spreading the cost of holidays and plane flights.
“Right now e-commerce is dominated by Afterpay and Klarna,” Mr Jackson said. "We prefer to stick to a niche, but it is a big niche. Aftersales is predicted to be worth €300bn by 2030."
He said Bumper plans to add another 80 staff to its headcount of 40 and launch a consumer app in Germany, Spain and the Netherlands in January.
