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Ferratum: A missed opportunity in leveraging 'Buy Now, Pay Later' in Spain

The problem

Ferratum, initially successful with the Creditomovil brand, faced serious challenges when mimicking Wonga's online loan model. Ill advised choice of a residential flat as their HQ offices on Castellana Street in Madrid, and internal power games, lead to brand damage and financial losses.

The solution

iBerotech aimed to pivot Ferratum's strategy by focusing on partnerships with tier-1 retail operators and introducing a 'Buy Now, Pay Later' (BNPL) business model through the Credit Tool. 

This is how we did it

Ferratum faced significant challenges in Spain, stemming from a problematic office location and an ill-advised decision to mimic Wonga's online loan application model. iBerotech aimed to pivot Ferratum's strategy by focusing on partnerships with tier-1 retail operators and introducing a 'Buy Now, Pay Later' (BNPL) model through the Credit Tool. Despite the potential of these initiatives, internal power struggles and a lack of strategic vision within Ferratum's management led to missed opportunities and, ultimately, the closure of its Spanish operations. The case serves as a cautionary tale about the critical importance of internal alignment and strategic vision in market entry and adaptation.

The challenge: Ferratum needed to adapt its business model to the Spanish market, moving away from the SMS payday product to a more complex website application process that would mimic that of Wonga. The challenge was not just to introduce a new lending service in a market that lacked product awareness but to shift the mindset of decision-makers who lacked vision.

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The solution: We focused on building partnerships with tier-1 retail operators such as Intersport and Disa petrol stations, both multibillion-euro companies in Spain. Through the Credit Tool, we aimed to introduce Ferratum to the emerging BNPL business model. However, internal politics and a lack of strategic vision within Ferratum's management obstructed these initiatives further.


The outcome: Despite the promising partnerships and the potential of the nascent BNPL model, Ferratum failed to capitalise on these opportunities catastrophically. The company eventually shut down its operations in Spain, incurring significant losses.


The legacy: This case serves as a cautionary tale about the importance of internal alignment and strategic vision when entering or adapting to new markets. It highlights the missed opportunities that can result from internal discord and a lack of focus.


Learn more: For more insights into how iBerotech can assist with strategic pivots and partnership development, even in challenging internal environments, please contact us directly.

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