Jaguar and Porsche refund payment app later for auto repairs
Porsche and Jaguar Land Rover have joined the “buy now, pay later” craze by investing in a startup that promises to lower the initial cost of auto repairs.
The two automakers have taken stakes in London-based Bumper, which divides the cost of after-sales support and repairs into monthly interest-free installments, as part of a $ 12 million funding round ( £ 9million).
Bumper works with 3,000 car dealers and manufacturers to stagger payments to consumers in six installments so they don’t have to take payday loans or use credit cards. He says the average repair on his service costs £ 700.
Managing Director James Jackson said he started the business after “taking my old banger for a service and ending up with a huge bill. I thought there had to be a better way.” .
Bumper receives a commission for the sales it secures and claims to increase dealership conversion rates by reducing driver upfront payment.
The funding round was led by Silicon Valley-based Autotech Ventures, along with Porsche Ventures in Germany and InMotion Ventures from Jaguar Land Rover.
Once a niche way to pay for fashion fast, ‘buy now, pay later’ companies have raised hundreds of millions of pounds as Gen Z consumers flock to the alternative form of credit.
Swedish juggernaut Klarna, founded in 2005, raised $ 639 million this summer for a valuation of $ 45 billion, while Australian Afterpay was acquired in August by US payment firm Square as part of a $ 30 billion deal.
It has encouraged other sectors to look into the method of financing. Several start-ups have launched “buy now, pay later” offers for business-to-business payments, while others have targeted the allocation of the cost of vacations and airfare.
“Right now, e-commerce is dominated by Afterpay and Klarna,” Jackson said. “We prefer to stick with a niche, but it’s a big niche. Aftermarket is expected to be worth € 300 billion by 2030.”
He said Bumper plans to add 80 more employees to its workforce of 40 and launch a consumer app in Germany, Spain and the Netherlands in January.