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Sydney-based Slice, a buy-now-pay-later travel industry startup that has been bootstrapped by its founders since 2017 and demonstrated resilience by surviving a massive drop in revenue during the pandemic, has secured $17.5 million in a major equity and debt round announced this week.
Founded by Farouk Ismail and Yannick Darmalingam, Slice operates an innovative lay-by model that allows users to lock in great travel deals via a small deposit and pay the remainder in up to 26 weekly payments.
The model has now been backed by $7.5 million in seed funding led by Peak XV Partners (formerly Sequoia Capital India & SEA) and a $10 million debt facility from Roadnight Capital.
The company, which launched in the US at the height of the pandemic, is said to have helped more than 70,000 customers access travel in a “financially sustainable way” since inception.
In a LinkedIn post, Darmalingam says the capital raise “means so much” to the founders.
“Not because it’s a big number, but because it validates the business we’ve built, and propels us to the next phase - scaling Slice into a global company that makes travel more accessible for everyone,” he says.
Ismail and Darmalingam struck the idea for Slice a decade ago when they both worked for the Commonwealth Bank’s collections and hardship department.
“We spoke to numerous customers who had used credit cards to pay for a trip overseas - often for a family reunion or a cultural event,” says Ismail.
“These customers wanted to be financially responsible, but because they had used a product with such a high interest rate, they were falling behind and feeling powerless.
“We wanted to create a product that would allow customers to book their flights, and then repay in manageable instalments before their trip. Our vision was to help customers access travel - while also helping them to budget sensibly and avoid financial hardship.”
Slice launched its key product, known as PayLater Travel, in 2017.
“In the beginning, we spoke to every customer on the phone; we manually made bookings and paid upfront with our own credit cards (the irony!),” says Ismail.
“Despite the janky product, our customers loved being able to lock in flight prices and having the ability to pay it off before they travel. We knew we were onto something.”
Amid the positive customer responses, Ismail says there were “plenty of unglamorous moments” behind the scenes for the business.
“When the pandemic hit in 2020, we lost 95 per cent of our revenue overnight,” he says.
“We were terrified, but we were also too busy to feel sorry for ourselves. We hunkered down, made hundreds of calls to airlines, and ensured maximum refunds and credits for our customers.”
Ismail says that if Slice was to survive, the partners knew they had to “dig deep”.
“With our backs against the wall, we decided to launch in the US,” he says. “I had to sell my car and Yannick refinanced his home. In other words, we bet the farm.”
The Slice founders say the fresh capital announced this week will help them expand the business and improve their product offering, while also scaling their B2B product for travel agents which allows them to offer the Slice payment method to their customers.
“As a founder that’s bootstrapped until this round, I must admit I’ve always been skeptical of the fanfare that surrounds fundraising announcements,” says Darmalingam.
“The coverage rarely shares the blood, sweat and tears - the first hundred flights we financed using our own credit cards, or the first thousand bookings processed manually on the bus home from work.”
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