Meet Elyn, a new French startup that recently raised a $2.7 million (€2.5 million) pre-seed funding round led by Headline and Sequoia Arc. The company wants to offer some flexibility when it comes to e-commerce online payments. Instead of paying for items before they are even shipped, Elyn lets customers try before you buy something.

This experience may sound familiar if you have bought items on Zalando, a popular e-commerce clothing retailer in Europe that has turned its try-before-you-buy option into one of its key selling points. Essentially, when it’s time to pay for items in your online cart, Zalando customers get multiple payment options. They can enter their card details or use PayPal like on any other website.

But they also have the option to pay later. This isn’t a Klarna-like ‘buy now, pay later’ option with the ability to spread a large payment over several installments. Users enter their payment card details and their card gets charged a few days after receiving the items.

This way, if you changed your mind and want to return an item, you can block the payment before it even occurs. This is particularly important when you’re selling clothes because it can be hard to pick the right size. Items may also look different when you can actually see them in person.

There are more than 300 people working for Zalando Payments specifically. That gives you a sense of the importance of the company’s in-house payment solution. If you can find the same T-shirt on Zalando or on another clothing store, you may decide to buy on Zalando based on this feature alone.

Making ‘try-before-you-buy’ mainstream

Many companies could benefit from this kind of payment experience. That’s why Elyn wants to offer try-before-you-buy to smaller retailers and brands. This is particularly important in France and other European markets where credit cards are nowhere as widespread as in the U.S. The product currently works with Shopify with other e-commerce platforms coming soon.

Once you start thinking about try-before-you-buy, you realize that it is intrinsically connected with returns. That’s why Elyn not only offers try-before-you-buy, but also handles the return system.

“With try-before-you-buy, you only pay for what you decide to keep,” Elyn co-founder and CEO El Mehdi Hachad told me. “We are also helping retailers with their returns so that return requests are turned into exchanges directly in the return interface that we provide.”

When a customer wants to return an item, Elyn asks you a couple of questions to narrow down the reason why you want to return something. Is it the wrong size or the wrong color? Do you want to get your money back? Do you want the same item in a different size? Do you want another item? Do you want a gift card?

If people just want to be reimbursed, Elyn will offer you a gift card with a bit more money than what you originally spent so that retailers don’t have to spend money from their cash balance.

If customers want the same item in a different size, Elyn can look in the retailer’s inventory directly and set the item aside if it’s available. Depending on the option that you select, Elyn can seamlessly adjust the upcoming card transaction. This is a smoother experience for the end customer as they don’t need to send something back, wait for the reimbursement and buy something else a week or two later.

By default, Elyn gives you five days to decide whether you want to keep something or not. The startup tracks packages so that it can send you an email when your package arrives to explain payment details and include a link to the return portal.

In order to avoid payment defaults, Elyn uses pre-authorization requests to verify the validity of Visa, Mastercard and CB cards. The startup charges transaction fees based on successful sales net of returns.

“The way we see the variety of payment options and services is that you want to offer something for every use case,” Hachad said. Some customers just want to enter their card details and move on. Others only want to pay with PayPal. Some people want to buy now and pay later using Klarna, Alma, Scalapay or another BNPL payment option. In some cases, customers like the convenience of Apple Pay.

And now, Elyn believes it can add another logo to the checkout flow for people who want to slightly delay their online payment. All these payment companies are tackling cart abandonment. Adding more options can improve the conversion rate. And it’s true that improving gross merchandise volume is a good way to convince online retailers that they should use your payment product.

In addition to Headline and Arc, Motier Venture (Galeries Lafayette owners’ family office), Financière Saint James, Marc Menasé (Founders Future) and Guillaume Princen also invested in the startup.


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