BNPL database startup Qlarifi raises £1.4m as regulation looms – UKTN

Qlarifi, a real time buy now pay later (BNPL) credit database startup has raised £1.4m as strict regulation of the payment type approaches. 

The Treasury said last October that legislation to tighten the regulatory burden on the BNPL industry would be coming in “early 2025”. And while there is currently no bill in place, extensive consultations have largely revealed how a new framework would work. 

Regulators have expressed concerns over the payment type – which allows spreading the cost of a purchase over several months – due to the ease with which consumers could find themselves in unmanageable debt. 

Among the expected new measures is the requirement for BNPL providers to perform affordability checks and share information on consumers’ use of the service with credit report agencies, bringing the practice more in line with other forms of debt products like credit cards. 

Providers of the service, such as Klarna, have been pre-emptively implementing security measures to meet the requirements of upcoming legislation. 

This is where startups like Qlarifi hope to come in. Founded in 2023, the company provides underwriting data for BNPL lenders via consumers’ transaction history. 

“Our reason for building Qlarifi was to create transparency and a fit-for-purpose solution to a problem that’s been frustrating us for too long,” said the co-founder and CEO Alex Naughton. 

Naughton’s co-founder Loic Berthou added: “We saw an opportunity to enable lenders to make better informed underwriting decisions by utilising the rich and growing dataset of transactions, and to help consumers build a positive credit history through the responsible use of BNPL.” 

The pre-seed round saw investments from HoneyComb Asset Management, Carthona Capital and a handful of angel investors including Australian former rugby star John Eales. 

“We’re delighted to invest in Qlarifi as they work to transform the rapidly growing BNPL market,” said Dean Dorrell, a partner at Carthona Capital.  

“With BNPL becoming an even more dominant force, their focus on delivering next generation technology is perfectly timed to meet the industry’s evolving needs.” 

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