Buy Now Pay Later (BNPL) startup Tymit has raised £23 million in a Series A round led by Mike Ashley-founded Frasers Group.

Founded in 2017, Tymit allows its partner merchants to offer customers payment options in installments.

“With this investment, we can expand our operations, attract new partners and continue to help merchants meet customer needs and drive growth,” said Martin Magnon, CEO and co-founder of Tymit.

“The credit providers and banks that dominate our wallets built their products for profit, not for consumers or merchants. High merchant fees of 2-8% may be good for profits, but they hinder merchant growth. This must be stopped.”

The new funding will be used to accelerate product development as well as support the launch of what the company calls a ‘B2B2C installment programme’, under which merchants can offer BNPL options to customers under their own brand.

A spokesman for Frasers Group said: “This strategic investment in Tymit will enable the Group to continue to pioneer the retail sector and later enter the ‘buy now, pay later’ market, improving the consumer experience and providing flexibility in all areas.”

BNPL’s payment model has become a popular option for those with limited cash. While BNPL gives consumers more flexibility in choosing payment options, there are also concerns that users may not understand the financial implications of using what is essentially a loan.

The government and regulators are now working to introduce tighter regulation of BNPL products. Financial Conduct Authority (FCA) previously alerted BNPL firms about fraudulent promotions.

Timit earlier raised £4m in a funding round in November 2019.

BNPL startup Tymit gets £23m boost from Frasers Group