Paidy has raised $143m from PayPal and a range of backers as the Japanese instant credit start-up plans to add new services and attract more customers.
The fintech, launched in 2014, completed a $83m Series C funding, that also included backing from Soros Capital Management, run by billionaire George Soros. Other backers include JS Capital Management and Tybourne Capital Management, as well as PayPal Ventures.
It also raised $60m of debt from a panel of banks, including Goldman Sachs, Mizuho Bank and Sumitomo Mitsui Banking Corporation.
Paidy says it has used big data streaming and machine learning to develop “the largest cardless, real-time payment network in Japan”, covering over 100 million Japanese customers.
Real-time credit checks
The start-up said it plans to use the cash to sign up larger retailers, offer new financial services and growing its user base to 11 million accounts by the end of 2020.
In Japan, even though credit card penetration is high, many customers do not use them for online purchases. They instead prefer to pay cash on delivery, or pay at pickup locations.
However, this leaves retailers to cover the cost of merchandise that hasn’t been paid for yet, or deal with uncompleted deliveries.
Paidy allows customers to pay for goods online using their mobile phone numbers and email addresses, rather than their credit cards.
The firm said it “aggregates the most popular non-credit card payments” to check creditworthiness in real-time. The platform covers the cost of the items for qualifying customers and bills them monthly.