CEO and co-founder James Jackson claims his startup Bumper is something unique among buy-now-pay-later (BNPL) startups: it’s profitable. Speaking exclusively with Verdict, he says that the company has been in the black for the past 18 months. Now, on the back of a $12m Series A round, the UK-headquartered firm is setting out to expand across Europe.

“Already a dominant player in the UK and Ireland, we’re currently rolling out our product in Germany, plan to launch in Spain and the Netherlands in the next three months, and have ambitions to be in every major European market by the end of 2022,” Jackson says.

The latest round brings the company’s total funding to $17.5m. The raise was led by Autotech Ventures, with participation from Jaguar Land Rover’s fund InMotion Ventures, and a group of angel investors.

The Bumper CEO refrains from offering any details about what valuation the round placed on the company, only noting that the startup has not reached unicorn status.

“Not yet, but we hope to be in the not too distant future,” Jackson says.

The BNPL industry is expected to keep growing to be worth $166bn by 2023, according to GlobalData’s thematic research. While most of the companies who refer to themselves as BNPL businesses provide services in the spontaneous shopping segment, Bumper instead offers interest-free, flexible payments to help drivers better afford necessary repairs and maintenance.

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By GlobalData

This means Bumper customers are normally doing big one-off purchases and not repeat shopping solutions like the ones offered by other BNPL businesses like Klarna, which the Bumper CEO says leads to lower default rates.

“We are lower than the average BNPL provider in the UK,” Jackson says, without offering any more details as to how low they are.

To further ensure ensure both dealerships and consumers are protected from loan defaults, Bumper has developed what it refers to a “machine learning-enabled automotive scorecard” as part of a credit checking process. While not utilising open banking, the CEO claims it conducts “a range of credit checks and affordability checks” on customers as well as sourcing customer data from the dealerships.

“We only collect this data once we have received permission from the customer to do so, but once granted we receive personal data on the driver (such as contact details) and information about the vehicle,” Jackson says. “We also receive a breakdown on what car repairs and/or parts we are financing.”

The company’s automotive focus is what convinced the investors to bet on the fledging venture.

“We believe that automotive repairs and the aftermarket are the next big BNPL frontiers, and that modern software and clever financial tools can unlock substantial value for industry participants,” says Alexei Andreev, managing director at Autotech Ventures. “The Bumper team has succeeded in building an industry-leading product in the UK and we are eager to support its expansion to Continental Europe.”

Bumper CEO drives down memory lane

Jackson came up with the idea for Bumper after realising just how expensive car repairs are.

“A few years back I was presented with a large repair bill for my car and when I spoke to the dealer about payment options, I was shocked my only choice was to either pay the full amount or reject the repair work and drive home in an unsafe car. I thought to myself, there must be a better way,” Jackson tells Verdict.

He decided to do something about it. The entrepreneur launched the startup in 2013 together with Jack Allman.

“I built a prototype and pitched it to a number of car manufacturers and then off the back of this, a number of them allowed me to survey their customers. As a result we discovered that the majority of customers who didn’t get all their identified repairs were prevented from doing so by the large upfront cost. At Bumper we remove this issue.”

For the first few years Jackson didn’t take out a salary, bootstrapping the company with his own savings and by raising a small amount from friends and family.

Since then, Bumper has partnered with Volkswagen Group, Ford, Jaguar Land Rover and Nissan. Approximately 60% of the franchised UK dealer market currently use Bumper’s payment platform, according to the company.

Bumper also plans to launch a consumer app – which will act as a one stop shop for all automotive requirements, such as payments for congestion charges, parking and tolls, and approving repair work – in the UK in January 2022.