Paytech Sezzle sizzles with $100m line of credit
Alternative e-commerce payment system Sezzle has pulled in a $100 million line of credit, reports Julie Muhn at Finovate.
The new round multiplies the Minnesota-based company’s existing funding by almost 10x, bringing its total raised to just shy of $111 million.
The funding, which comes from Connecticut-based investment firm Bastion, is being used to fuel Sezzle’s new pay-in-2019 initiative with online retailer Tobi.
The promotion, which will be available throughout the holidays, gives Tobi shoppers interest-free purchase financing.
After paying 25% of the purchase price at checkout, shoppers can wait to pay the remaining three-quarters of the purchase, interest-free, until after 2 January 2019, at which point they pay in three equal installments.
Tobi’s target market is focused on young females – a demographic which typically either has no credit or thin credit files.
“Because these young consumers are credit-starved, they tend to abandon their online shopping cart instead of clicking through to purchase,” Sezzle CEO Charlie Youakim says. “With our option, those shoppers are more likely to convert to a sale. We even see them spending more and shopping more frequently.”
The pay-in-2019 payment model is a departure from Sezzle’s existing buy now, pay later offering, which typically allows users to spread the repayment of the purchase price across six weeks of financing. If the trial with Tobi yields increased sales results, Sezzle plans to move forward with the new financing model with other retailers, as well.
Last month, the company teamed up with Priority Payment Systems which will offer Sezzle as an option to its merchant clients.