As Buy now, pay later (BNPL) options catch on in e-commerce, Atlanta-based Verdata is ready to help ensure companies creating those short-term financing options have the data they need to make those transactions work.
The team just raised a $3 million seed round from “leaders in fintech, regtech, lending solutions and analytics” to do just that.
CEO Mike Mondelli told Hypepotamus that Verdata is well-positioned as embedded finance options continue to grow in popularity. He described it as a complex “three-party relationship” between a consumer, a store, and a company providing the underlying financing. While embedded finance options started out in popularity within the mattress and furniture space, they are increasingly part of e-commerce, home renovation, or medical procedures.
“Consumers don’t really go into banks to take out loans anymore. And banks essentially have to originate loans to make money. So many financial companies, whether they’re FinTechs or big banks, are looking to be where the consumer is,” Mondelli told Hypepotamus.
Verdata’s core customers are lenders like GreenSky, Affirm, and Virginia-based Koalafi. Mondelli added that the team is increasingly moving into the payments space as well.
“COVID was a big catalyst for retail finance options, but I don’t see that changing even when COVID goes away,” he added. “We see embedded finance as a big macro trend. We’re starting in buy now, pay later we’re moving to payments and then SME lending.”
Mondelli has built his career in the FinTech space by launching Atlanta-based L2C, a company focused on providing consumer credit reports and scores off of alternative data. This, Mondelli told Hypepotamus, gave “younger, new-to-the-country immigrants, or new credit consumers access to credit earlier by giving them credit for bills they were already paying.”
L2C was acquired by TransUnion, where Mondelli held an SVP role starting in 2018. He jumped onto the idea of Verdata after seeing just how much the embedded finance trend was picking up as an option for both discretionary and non-discretionary purchases.
Verdata is one of a growing number of Atlanta-based FinTech and payment startups working in embedded finance and BNPL. Mondelli sees building in Atlanta as an advantage as the team continues to grow in the payments space.
Verdata’s co-founder Nate Marcus lives in Virginia, and about half of the team is currently located in Atlanta. The remote-first team will use the funds to expand in 2022.
Mondelli added that Verdata will look at raising a Series A “sometime in 2023.”
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Photo by Alexander Mils on Unsplash
