Tera Ventures led the €2.5 million seed round to Montonio

Tallinn-based Montonio has raised €2.5 million in a seed funding round and wants to become the one-stop-shop checkout solution for e-commerce merchants and consumers.

On the consumer front, the company is capitalising on the prevalence of buy now pay later (BNPL) financing and offers consumers the ability to compare offers from multiple lenders in real-time. According to the startup, when compared to bigger players, its solution reduces consumer credit costs by up to 50% and results in higher conversions for the merchant.

For merchants, the company offers a payment solution based on open banking, one that can cut costs by up to a factor of 100x when compared to traditional mechanisms such as Visa or Mastercard.

Currently active in the Baltics, Montonio has partnered with over 1,300 e-commerce merchants and reports that a quarter of all Estonians have had an interaction with the service in the first half of 2021 alone.

“BNPL has been available in the Baltics for over a decade and recent years have seen many new competitors enter the market. They all look the same to the consumer, offering similar terms, and often at checkout they only get one offer, even if technically a cheaper option is available,” comments CEO Markus Lember. “Montonio takes on the role of the consumer advocate — our product aggregates the offers and helps the buyers pick the best option.”

Montonio’s seed round was led by Tera Ventures with ffVC and other VC firms participating. The raise also saw several angel investors’ involvement including Bolt CEO Markus Villig, Bolt’s first investor Mikko Silventola, former Pipedrive executives Sven Kirsimäe and Kair Käsper, former Wise executive Triin Hertmann, and Lightyear co-founder Martin Sokk.

Ellex in Estonia advised Tera Ventures on the investment. The team was led by Counsel Antti Perli and included Senior Associates Anneli Krunks and Hanna Pahk, Associate Merlin Liis-Toomela and Lawyer Priit Pruks.