We advised Tallinn-based Montonio, the new one-stop-shop for online businesses looking to take their e-commerce sales to the next level – on raising EUR 2.5 million from current and former Bolt, Wise and Pipedrive executives and VC firms.
Montonio has built a unique financing solution that lets the customer obtain buy now pay later (BNPL) offers from multiple lenders in real-time, compare them, and sign the one they find most suitable. Compared to the large BNPL players on the market, like Klarna, the solution decreases the credit costs for the customer by up to 50%, while significantly increasing the conversion rates for the merchant.
Markus Lember, CEO of Montonio explains: “Even though the BNPL market is full of new players, the product has been around in the Baltic states for decades. Unfortunately, the loan providers fail to differentiate from each other. Quite often the consumer has only one provider to choose from at the checkout, regardless of the pricing offered. Thus, we see that the market needs some competition for the end-user – and that’s the issue our product solves.”
Apart from financing, the company has developed an e-commerce payment solution based on open banking that can cut costs up to 100x in comparison to traditional card payment schemes like Visa and Mastercard. The solution has been extremely well received and used by a quarter of the company’s native Estonia’s population in just the first half of 2021 alone.
Big interest from market
The company has partnered with more than 1,300 e-commerce merchants across the Baltic states and other European countries. “We are seeing BNPL and open banking start-ups reach historically high valuations and record round sizes – and so was our current round nearly 3x oversubscribed”, comments Lember.
“Montonio has quickly become the market leader for e-commerce checkout providers in the region. They are able to provide a full range of checkout products and that’s what makes them so attractive for merchants,” said Markus Villig, CEO of Bolt and investor in the round.
Looking to expand their reach
The seed round was led by Tera Ventures, with participation from US-Poland based ffVC, Superangel, Practica, 365.fintech and Startup Wise Guys. Several business angels also participated in the round, including Bolt’s CEO Markus Villig, Bolt’s first investor Mikko Silventola, former Pipedrive executives Sven Kirsimäe (current CTO of Rendin) and Kair Käsper, just to name a few. The round is a part of the convertible instrument round closed last year.
The investment will be used to expand into new markets across the EU and to gain market share in their existing markets.
Our services and client team
We supported Montonio throughout the fundraising process by, among other matters, preparing and negotiating all relevant transaction documents.
Our client team was led by senior associate Mirell Prosa, supported by partner Toomas Prangli. Our key client team also included counsel Jane Eespõld, senior associate Robin Teever and associates Vladislav Leiri and Liutauras Vasiliauskas among others.
Previously we have also advised Montonio on raising EUR 500 000 – more information.