German B2B buy now, pay later (BNPL) outfit Mondu has received €20m in debt funding from Vereinigte Volksbank Raiffeisenbank (VVRB) bank.

The investment represents the first loan given to Mondu. It has been granted in a special purpose vehicle (SPV) set up based in Luxembourg and is collateralised.

This SPV-model is said to help Mondu scale and expand its refinancing with outside investors spreading across Germany and beyond.

The latest investment comes shortly after Mondu’s $42m raise in May this year. The funding was expected to support the firm’s expansion in Europe.

Mondu co-founder and co-CEO Philipp Povel said: “This is another strategic milestone for Mondu. To have VVRB, a member of the distinguished Group of German Cooperative Banks, provide this loan gives a high level of credibility to our business.

“It’s proof that our payments solutions are appealing to outside creditors.

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“The financing will further support our European expansion and allow us to develop further payment solutions that benefit business customers.”

In addition, Mondu revealed its plan to launch an office in the Netherlands this month to support its growth.

Under this expansion, the firm seeks to recruit people locally and spend in local marketing activities.

Povel added: “The Netherlands has a modern trade market, with 48% of B2B orders placed online.

“This year, B2B e-commerce revenue from physical goods alone will hit approximately $38bn. By 2025, revenues are expected to grow to $54.5bn.

“With Mondu’s BNPL solutions, B2B businesses in the Netherlands will be able to increase conversion rates and loyalty by allowing buyers to experience a fast and frictionless B2C-like payment experience with flexible terms.”

Since its inception last year, Mondu has secured a total of $57m in funding through seed and Series A equity funding from several investors.