How Kriya Payments’ embedded finance solution delivered value and growth to the customers of B2B building marketplace, Materials Market

Goal

Region

United Kingdom

Industry

Construction

The Challenge

Bringing online credit to the offline world of construction

The Solution

Embedded finance with Kriya Payments

Materials Market brings B2B buy now, pay later to the construction industry

Materials Market used Kriya Payments to offer embedded credit to their customers. We sat down with the two Co-Founders, Samuel Hunt and Andrew Haehn, to learn more about their story. They explain what problem they’re solving and how Kriya is helping in that mission.

The Materials Market story

Materials Market is UK's only true marketplace for building materials. They connect buyers and suppliers of building materials in a really competitive space. They compare their service to Uber, where you don’t know who your driver will be when requesting a ride.

When purchasing from Materials Market, your order goes out to hundreds of different suppliers. Materials Market then secures the best price and fastest delivery time by connecting you with whoever is most suited for supplying those building materials for you.

What’s the problem Materials Market solves in the building industry?

According to Samuel, construction is known as the “lastminute.com” industry. And it is still predominantly offline, in what has been a traditional sector. Today, it is going through a digital evolution, with a lot of its processes moving online. It’s a clear opportunity for all players in the industry, but there are still a lot of kinks to straighten out.

“In the contracting world, there are essentially three criteria for purchasing. Price, lead time, and supply. And making sure that you get all three is really difficult. You can always find a good price, but not the delivery time or it's out of stock. We thought – it shouldn’t be this difficult, right?” - Andrew Haehn, COO and Co-Founder.

This complexity means a lot of time on the phone trying to get quotes from different suppliers while the deadline creeps up. Materials Market automates the process, slashing delivery times and prices, and enabling contractors to deliver on their timelines.

Why offering credit at checkout is important

After pivoting to their current business model in January 2021, the start-up has seen rapid growth. But the founders knew how transformative offering credit online could be to their B2B marketplace.

“Trade customers in construction expect credit. They don't expect it online. That's something new for them. But they do expect their traditional suppliers, the bricks and mortar suppliers, to offer them credit. And so being able to offer them credit digitally is a game-changer for them.” - Andrew Haehn, COO and Co-Founder

“The great thing about trade credit is that because the retention rate is so high, every month you are gathering more and more customers and the growth becomes exponential.” - Samuel Hunt, CEO and Co-Founder

Why did Materials Market choose Kriya?

The landscape of B2B credit providers is highly competitive, with lots of options from B2B buy now pay later to invoice financing. Quite simply, B2B businesses have a lot of choice to offer credit to their customers. So why did Materials Market choose Kriya for their B2B embedded finance partner?

It embedded easily within the existing platform

Samuel shared that they “identified Kriya as the solution that would embed with our existing platform. That means that the customer can engage with one platform the whole way through, rather than having to deal with the materialsmarket.com website, but then, deal with an outside credit provider and possibly some other software.” This builds trust and doesn’t create unnecessary barriers for the end-user. It boiled down to Kriya’s easy and fast integration through a single platform.

High credit limits

Andrew shared that they initially integrated with another B2B buy now, pay later (BNPL) solution, but really struggled to grow with them – “We didn’t have the credit limits for our customers that we needed.”

“A lot of other providers are quite conservative to the point of offering limits that are very restrictive. If a customer is regularly spending £100,000 and you're offering them a £10,000 credit limit, they’re not even going to bother trading with you” adds Samuel.

Instant decisioning

Another major factor in Kriya’s factor was instant decisioning. Customers can receive a credit limit within seconds rather than going through a lengthy process of filling out a form, sending it off for a credit safe report and waiting for the credit control department to make a decision.

“This is all based on algorithms and empirical data, so we’re able to get proper limits based on factual evidence. But we can get them very, very quickly and feed them back to our customers. Because of that, we can even do a lot of prospecting. We can do a soft check on a customer for a credit limit before approaching them with the limit essentially ready. And that obviously helps us convert those customers a lot more effectively.” - Samuel Hunt, CEO and Co-Founder

What results did Materials Market see after integrating with Kriya?

Compared to their previous credit provider, Materials Market has seen credit sales increase by an astounding 1,155%. They also find that customers are more than twice as likely to place a second order if they have a credit account.

Average credit order value is 3.6 times higher than average cash order value, with average credit order reaching £3,057. Monthly cohort growth for credit customers is nearly quadruple that of cash customers.

Over the last five months, credit orders account for 12.5% of overall sales. This peaked at 21% and is expected to grow to 50-56% within the next six months.

“We've had significant growth since we've started offering credit at checkout with Kriya. We are now doing over £100,000 a month with Kriya just because we're offering that service for them. And I can see that that growth is just going to continue to skyrocket.” - Andrew Haehn, COO and Co-Founder

The growth Materials market saw after integrating with Kriya’s marketplace finance solution

Kriya’s personal customer service

We are proud of our market-leading reputation for customer service, and this shines through for Materials Market as well.

“We found that Kriya listened to our needs. They didn't always have a solution out of the box for us, but they would say, look, what do you need? How can we work with you? And that was really great for us, because you don't always get that when you work really closely with another company. The team's always been really lovely, productive, and they always get back to us really quickly.” - Andrew Haehn, COO and Co-Founder

“It was clear that Kriya had the expertise and knew what they were doing. But at the same time they were really flexible and listened to our requirements. You know, every single B2B marketplace is different. Their customer base is different. The historical ways in which those companies have done business is going to be different. So if you don't have any flexibility and you just believe that your product is one size fits all, then you're not going to be successful and you're not going to maximise customer spend.” - Samuel Hunt, CEO and Co-Founder

What’s next for Materials Market?

They’re raising! Materials Market is looking to raise their Series A investment in 2023 which will give them the ability to grow further. With marketplaces it’s about achieving scale, so they’re focusing on onboarding suppliers and continuing to grow their customer base.

At the tail end of 2022 they launched a next day delivery service for most regions of the UK on popular products they sell. And first and foremost, they’re focused on solving the root problem.

“At the end of the day, I'm still building that solution for the buyer that I was when I was 20 years old and really fed up and having to work ridiculously long hours just to get a piece of plasterboard to site on time. So we're still ultra focused on solving that problem” explained Samuel.

Interested in providing flexible payment options to your customers?

Are you a B2B eCommerce business looking to offer embedded finance to your customers? Get in touch and find out how our team can help!

“We expect our B2B revenues to double as a result of providing Kriya’s flexible payment terms to our trade and business buyers.”
Stuart Zissman, Head of Financial Services

Halfords is the UK’s leading provider of motoring and cycling services and products. Its customers shop across over 1,750 fixed and mobile locations including, Halfords stores and garages, as well as its website, halfords.com.

Today, around a quarter of Halfords turnover is business-to-business. They sell to organisations of all sizes including SME businesses, garages, and workshops, offering discounts on automotive parts and tools with their Trade Card, as well as directly to larger commercial and government customers that buy in bulk.

However, like many well-established enterprises, Halfords found its future growth was challenged by the legacy processes of its past. Find out how they’ve teamed up with Kriya to remove the friction from their B2B commerce.

Halford's challenges

“The exam question” says Halfords’ Head of Financial Services, Stuart Zissman, “was how do we make selling to business and trade buyers less labour-intensive?” Having already overseen a successful consumer finance proposition at Halfords, it was clear to Zissman that their B2B offering had potential to grow by introducing a simple and effective credit solution.

1. B2B buyers expect payments terms

“All successful B2B propositions have some sort of financial support” Zissman explains. Whether large or small, Halfords’ business buyers want to be invoiced on payment terms. This is especially beneficial for garages and workshops, which thrive on efficient working capital cycles, allowing them to source parts upfront and defer payment until they have received compensation for their services.

Halfords recognised the opportunity to enhance their offerings by providing scalable trade credit, which was previously untapped. As Zissman says, "offering payments completes the circle."

2. Manual, unscalable processes were holding back growth

Halfords' hands-on approach to B2B processes presented an opportunity for greater scalability and growth. Wholesale orders, managed via account managers, involved manual quotes and purchase orders, which added complexity.

“We’d like to say yes to every single customer that wants to order from us,” says Head of Trade Card, Chris Millan. However, processing these detailed orders for existing buyers took time, limiting the retailer's ability to proactively attract new business and expand their account base.

What Halfords sought was a way to make their B2B offering more accessible and achieve a better economy of scale.

“We work with sole traders, business customers and government entities. Kriya is the only supplier that could support all three.”
Chris Millan, Head of Trade Card

The search for a solution

Recognising the need for change, Halfords set out to find a way to modernise its B2B offering. With Kriya's 12-year track record and willingness to collaborate on a solution for their unique requirements struck a chord with Halfords.
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A solution for all B2B buyers

Halfords has a diverse buyer base and needed B2B payment terms that could be offered to limited companies, government entities and sole traders.

Multichannel

With trade customers already purchasing online and in-store, Halfords needed a solution to offer payment terms holistically across their sales channels.

Risk expertise

With their focus on Motoring and Cycling, Halfords sought a partner with strong expertise in finance and payments, including robust credit and fraud detection capabilities, to help onboard their buyers.

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“We are experts in motoring and cycling, and to ensure exceptional service for our customers, we decided to partner with Kriya, specialists in B2B payments and lending decisions.” Stuart Zissman, Head of Financial Services

The B2B vision

Halfords partnered with Kriya to transform their B2B offering. By integrating Kriya PayLater with their Trade Card, the retailer is combining trade discounts for B2B buyers with the ability to pay on account for online and in-store orders.

Adopting an eCommerce-first model has a number of advantages. Firstly, providing online buyers with highly-demanded payment terms expands the businesses they can sell to. Secondly, much of their offline business can be shifted to a self-serve, online checkout. Not only does this provide a smoother buyer experience, it also frees up the Halfords team to focus on the customers where their expertise has the most impact.

The near-infinite scalability of the Kriya solution means Halfords can not only improve their overall B2B customer proposition and experience, but they can also see financial benefits through the partnership too.

“Offering trade credit through payments makes it much slicker. It’s something buyers are familiar with from the consumer world.”Chris Millan, Head of Trade Card

Wholesale change

Halfords have kicked off their payments transformation with their wholesale offering.

Business buyers come to the Halfords wholesale team to place bulk orders and request custom details, such as branded bikes and accessories. Before Kriya, this fully offline sales channel required multiple teams and processes to transact each order. This process led to delays and hampered conversion, such as inventory becoming unavailable during the order, or customers purchasing elsewhere.

By streamlining the entire wholesale workflow into Kriya Merchant Portal, Halfords now have a single, automated flow for processing orders.

Wholesale buyers are first onboarded into Merchant Portal. This screens for credit and fraud risk, directly providing their sales team an instant spending limit decision for the buyer. Orders can then be placed on payment terms and invoices are automatically generated for the buyer. Additionally, Kriya assists with credit control by managing payment collections too.

“We needed a way forward that was less hands-on because the whole process was very, very manual.” Chris Millan, Head of Trade Card

How it works

1

The buyer places a wholesale order with Halfords

2

Halfords onboard the buyer into Kriya’s Merchant Portal

3

Payment terms selected and purchase complete. The buyer pays at the end of the following month.

Partnering for growth

Reflecting on the journey so far with Kriya, Zissman says “It’s that personal touch and relationship that makes the difference to the product we’re building together.” For Zissman, it's not simply outsourcing the expertise to a third party. “It’s more like we’re onboarding Kriya into Halfords and by extension they’ve become part of our team”.

There’s a busy roadmap ahead for Halfords and Kriya, with plans to bring the whole multichannel offering to market by the autumn of 2024.

We're very excited about this development,” says Millan. “Introducing payment terms to our Trade offering eliminates barriers that previously slowed us down and unlocks opportunities with a vast number of businesses we haven't historically engaged with.”

B2B Payments to boost your growth

To learn more about our payments and digital trade credit solutions book a call with us today.

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