Launched in 2012 under the brand of European fintech Revo Technologies, Mokka is a BNPL-type service provider with over 10 million unique customers. Internationally, the group has over 7,500 partner stores, both physical and online. Starting last year, Mokka launched in Romania and has, at the national level, partnerships with top retailers such as Mobexpert, Lensa, CCC, Humanic, Noriel, Ideal, and GoMag.

Revo Technologies was founded by Irene Shvakman and Fernando Dias Da Silva. Before founding Revo, Irene was a Senior Partner at McKinsey & Company, where she led McKinsey’s work with major financial institutions in Central and Eastern Europe, Russia, and CIS countries. Revo Technologies is backed by leading technology investors, including VEF, Baring Vostok Capital Markets, and Castel Capital. Last year, Revo had $40 million in revenue.

Irene is American. She spent her early career in the US and then returned to CEE in the mid-nineties to join McKinsey. She was born in Ukraine and emigrated to the US as a teenager. Irene Shvakman holds an MBA from Harvard Business School and a BS in Biochemistry from Brown University in the US.

I met with Irene and had an exclusive interview about their plans in Romania, further strategies, and how BNPL will change the retail and fintech worlds.

How did you come up with the idea to start Revo Technologies?

My partner, Fernando Dias Da Silva, and I spent our careers working with traditional financial institutions, major banks, insurance companies, stock exchanges, and regulators. He was focused on risk management, which is a very important field for any successful financial institution. And I lead Mackenzie’s work in this region with financial institutions. So, both of us started with a very deep understanding of what makes traditional financial institutions and how traditional financial products work, and that understanding allowed us to be quite confident that major financial institutions were weak when it came to technology. 

They have decades of legacy systems that are holding them back from being able to introduce new services and technology, and so understanding that they would be very slow gave us the confidence to launch Revo.

The idea behind Revo was to bring new technologies to consumers and merchants. The other thing that then helped us crystallize the idea for Revo was our work with retailers. And so, we visited retailers to find out how a customer gets Buy Now, Pay Later. And what we saw was terrible, and this was just a few years ago.

It was terrible in Romania. I remember visiting Flanco and seeing that when a customer wanted to pay for their refrigerator with a loan, they were given a form to fill in. They were told to go to their workplace to have somebody sign and stamp that form, bring that form back to the store, and then wait a week. And then come back a third time to the store. 

I fully understood that that experience just doesn't work for the merchant. I mean, only a crazy merchant would send their customer away and come back three times. We understood that retail is also transforming; they're becoming more and more online, using more and more mobile apps. This was crystal clear ten years ago. I also understood that the banks would not be in step with their merchants.

What is Mokka and what does it do?

Our service fulfills the needs of merchants and their shoppers. We need to satisfy the needs of merchants as much as their shoppers. So, what do we do for merchants? We give them a solution that allows them to increase their sales. How? Well, it allows them to attract new customers, convert more customers that are coming into the store, raise the basket, get more return customers, and raise the average check value.

That's a very important proposition for merchants because they just want to have more sales. They want to have fewer customers coming in and leaving with empty hands. They are focused on driving higher value and increasing conversion, reducing the number of dropped baskets.

That's exactly what we do, and we give them technology that does that, both online and offline.

Mokka is a unique BNPL app because it works both online and offline, particularly for merchants that work across channels, which most big merchants do now. They need to have an omnichannel experience, so we give them that solution.

On the other hand, what consumers get is transparency. It's simple and easy. There are no hidden fees or commissions, and they know exactly how much they're going to pay with Mokka.

So how is Romania for Mokka so far?

We launched Romania last year and I would say we're extremely pleased with the progress that we have here. We are now working with some 200 merchants. We've covered a lot of the major categories, electronics, fashion, footwear, kids, furniture, and DIY. We are still looking for our next first partners in jewelry, cosmetics, and beauty. We have launched a partnership with GoMag to add a plugin for all their merchants.

We're looking to add other partnerships with payment services providers to expand our reach even faster.

We have several showcase partnerships like Lensa, which was our very first partner that we launched in Romania, and we've been extremely proud of the work with them. We're now present in all their stores. We were able very quickly to reach 7-10% of turnover in Lensa stores with a great three-month 0% interest product. We are still looking forward to our launch at the Lensa online store. Ideal is another partner that we launched more recently with them and to achieve impressive results, the average check-up is 42% with Mokka and up to 5% of turnover with us in very few months.

So, we're seeing a great customer base, very interested. Up to 25% of customers are making repeat purchases, so that's very, very positive.

It gives us exactly what we were looking for. The average check with Mokka is about 1.000 lei. It's very significant, and it shows merchants that whatever category they're in, we're approving a significant amount, and it allows customers to spend more. Even in footwear retailers, we are partners with CCC, Humanic. The average check is up to two to three times more than their typical sum. 

The other thing that we have recently done is launch our mobile application for consumers. The mobile application allows consumers to register with us directly and look for stores where Mokka is available, and so we are creating another platform for merchants to promote themselves to all the customers.

So, we're very proud of the growth that we've seen here in Romania; tremendous momentum, and good acceptance of merchants. We found the right-profile customers and a significant uplift in average order value, and this gives us confidence that we are on the right track and that our proposition is relevant here.

Soon we're adding several new features to the mobile app. For example, our customers will be able to get an instant cash advance in the mobile app, and we will be launching a MasterCard virtual card in the mobile app that will allow customers to shop anywhere with Mokka.

What kinds of customers prefer the BNPL solution?

BNPL is growing tremendously and it's becoming a must-have payment option, meaning it's being broadly accepted by consumers and broadly adopted by merchants. If we look at our Romanian business, we are already working with merchants across a very broad set of segments, like fashion, footwear, kids, electronics, furniture, DIY and eyewear, and we're continuing to add more and more customers. We're working with more than 200 retailers in Romania, and we have about 7.500 merchant partners across all categories. 

If you look at the consumers who are using BNPL, it's becoming more and more broadly adopted because, frankly, they're not satisfied with the banking offers and they like the value and they like the experience of using BNPL. The early adopters of this service are younger people, 25 to 38, digital natives, and people who grew up with digital, and that's the core of the customer base.

But for example, if you look at the US, Australia and UK, where BNPL has had more years, it's very broadly adopted by people aged 45 to 55, a quarter of them are using it; and in the 25 to 38 age group, 45% of people are using it. 

And how did retailers perceive it at first?

I would say that merchants have an enormous drive to change because their industry is changing so quickly, with the emergence of marketplaces like eMag and Allegra. Merchants are under enormous pressure to compete, so they're looking for innovation. And they're quite open to it.

Having said that, like any business, they want to know what they can get from this. So, we’ve spent a lot of time with merchants, quantifying how much their average check will go up and how much their drop baskets will go down, because they wanted to understand those numbers.

We have recently done a case with Ideal, one of our Romanian partners, to get those numbers with them. They've allowed us to share those numbers, and the numbers are tremendously significant. The average order value with Mokka at Ideal is 42% higher and up to 5% of their customers are paying with Mokka. 

On the other hand, integrating IT at big merchants is also complicated, and we are working on making Mokka as easy as possible to add. We have developed and launched a whole series of plugins that merchants who are working on a particular e-commerce platform can easily install, so don’t require them to know three teams of developers.

It means that with Magento, PrestaShop, OpenCart, GoMag, Shopify, and WooCommerce, we can now deliver merchants that plugin, and within a half day it can be up, while with GoMag it's not even a half day, it's only five minutes. 

How does Mokka work for the customer?

Let's say I'm a customer shopping online for one of our fashion partners, B-Mall. When you select a product, the first thing you see on the product page is the split price of the product. It’s a widget that the merchant installed onto each product page that splits the item's price into installments, and there is a lot of technology. The technology on the product page divides the price of the item into a certain number of monthly payments and allows us to instantly approve a customer. This instant approval is quite a big technology that allows us within 15 seconds to review any individual.

We ask the user to give us only their name, phone number, email address, and ID. There's nothing else where the bank will have 25 questions. With these pieces of information, we start checking in our database if we have information about you. If we don't, we look at external data sources. Each market has different sources, whilst in the case of Romania, we work with a variety of data service providers. A service provider tells us something about the history of your phone number. We may interrogate the credit bureau, or we may go to a service that allows us to understand the history of your email address. There is tremendous growth and development in this field. Obviously, within the confines of GDPR, all of this is legal.

But there are more and more data services available, and so we leverage those data services to be able to, within 15 seconds, check them and get the information back. This is a process that through our automated algorithm decides, and what the user gets is something very easy, the approval and how much one can spend.

Have you had clients that couldn't pay?

Of course, like in any financing business, we have customers who either don't want to pay or cannot pay. I would say for us, that is a number that is extremely low because we approve many customers and the exposure to each customer is low. 

A big part of our work is improving those algorithms, so we make fewer mistakes. And there are two kinds of mistakes that we make; rejecting good customers and accepting bad ones. 

So, we are working on minimizing those mistakes in our algorithms and that comes from having more and more data, more data scientists, and risk managers that are working all the time on adding more data sources, looking at our statistics, and improving our models.

How is Mokka different from other fintech?

We are the leading player in BNPL in our geography. Yes, there are other BNPL companies globally, but they are not here. We are differentiating ourselves because we're focused on this geography. This is our core market, so we are number one. We are moving quickly to reach all the key markets and all the major merchants that operate here.

One other thing is that we offer omnichannel solutions. We believe that for major merchants, it's important to deliver a full experience, so we give them a product for online, mobile applications, and physical stores. 

We offer shoppers the choice because we have this feature called Adaptive Checkout, which gives customers a choice about the period they can pay. And that is a very, very important differentiator. You have some BNPL players that only offer one option, like paying in 30 days or paying in six weeks. Mokka offers a range of options that allow us to approve more customers, which merchants want, and to have a higher basket, because if you can take more time to pay, you can spend more.

It allows us to work with any kind of merchant because if all you can offer is a one-month product, it's very, very hard to be successful in electronics. After all, customers cannot pay for their refrigerator for 30 days. Well, some customers can, but most customers want more time to pay, and so having that adaptive checkout is quite distinctive.

Very few BNPL players have that globally, but again, it comes from our understanding of our geography. People need more time to pay. Merchants want a Buy Now Pay Later solution in all categories and all channels. That's what makes us distinctive.

Tell me more about the several investment rounds because I think those rounds helped you become what you are today.

They were critical. So, when we founded the company, my partner and I, well, it was our savings that went into the business, and it took maybe two years before we brought in our first institutional investor, a Swedish fintech fund called VEF. They're traded in Stockholm, and they initially invested five million dollars in round A.

Two years later, we brought in our second major investor and then raised a second round of funding totaling 25 million dollars. That allowed our company to quickly grow and break even, and then start to also raise debt. By now we have invested 25 million dollars in equity plus 50-100 million dollars in debt which allows us to offer financing on very good terms for merchants. It came in stages, I would say that capital was extremely important for us to scale up and reach break even, and that allowed us to finance ourselves. 

What was the expansion strategy in the region?

Our first markets were Russia, then Poland, and then Romania. The Romanian market was very interesting. There were a lot of banking activities here, like the Greek banks, the Turkish banks, and the European banks. So, when we looked to expand in Central Europe, we knew from the beginning that we wanted to be in Poland and Romania as quickly as possible, as these are the two biggest markets in terms of population.

Why did you launch the app in Poland before Romania?

The answer is very simple, actually. It took a very long time to get a license in Romania, much longer than we expected. We would have launched even faster. Poland has very different regulations for our activity than in Romania. Here, we are regulated by the National Bank as a nonbank financial institution. We had to submit all the paperwork and go through the licensing process, and that added nine months, so that's why Romania came a little bit later than Poland, but otherwise, we would have launched even faster here. We're now going through the same process in Bulgaria and Hungary, and they will be coming next.

What are the challenges for Revo Technologies?

Of course, the political situation in our region is a big concern for us, and we are extremely concerned about the war, especially for me, because I have family in Ukraine. This touched us not only as a company but also personally, and we think it's a real tragedy for not just Russia and Ukraine but all of Europe. We pray very much for a fast resolution. We as a company have contributed to Ukrainian refugee efforts, and I'm raising money for that myself.

Another thing that I would say has been a challenge is raising more investor capital for this geography. Fintech has been quite hot for the last couple of years all over the world, but if you look at fintech investments in this region, they're a pittance, and so that's been a challenge.

Where will Mokka go from here on?

Our plan this year is to grow exponentially in Central Europe. That is going to come from both growing in Poland and Romania as well as launching in Bulgaria and then launching in Hungary, probably sometime next year. But in Bulgaria, we plan to launch this year. We already have some team members there and are waiting for licenses.

We have a good foundation with highly committed partners and a good customer base, and the plan is to continue to build up. We plan to make Romania a hub because we are finding great talents here and great technology, and we think this is a great place for us to build an original hub.

Photo credit: Revo Technologies