E-Commerce Payment Solutions Provider Sezzle Raises $100M
Financial technology startup Sezzle announced Thursday that it had raised $100 million in debt financing from firm Bastion Capital. The money will go toward growing Sezzle’s retail payments business, including boosting its volume with existing and new merchant partners.
Sezzle specializes in the retail space, working in the interest of both consumers and retailers.
At its inception, Sezzle was focused on helping young adults with credit issues by providing them with interest-free installment plans for online purchases. With Sezzle, consumers can split purchases into more manageable installments, increasing the user’s purchasing power.
In turn, this improves conversion rates, purchase frequency and other intake for retailers. As TCB reported in 2017, Sezzle uses ACH payment processing, or digital debt, which bypasses a middleman usually used in e-commerce transactions. This reduces merchant processing costs by up to 50 percent.
Since Sezzle launched its latest payment solution for consumers 14 months ago, more than 4,000 merchants and 200,000 shoppers have signed up for the service. Despite the scale of its use and the size of its recent investment round, Sezzle is a mere two years old.
“What's exciting about our growth,” said Sezzle co-founder and CRO Paul Paradis in a statement, “is that our mission to financially empower young consumers is working so well, for shoppers and merchants alike.”
The $100 million in financing from Connecticut-based Bastion Capital follows a spring fundraising round by Sezzle that sought to raise about $12.4 million and attracted at least 13 investors, according to an SEC filing.
In the leadup to its financing, Bastion said it was inspired by the praise from Sezzle’s partners about working with the company and its service.
“Despite the stresses of their tremendous growth, we still found that both their merchants and shoppers were extremely happy with their product and services,” said Jay Braden, Bastion's managing partner, in prepared remarks about the Connecticut-based firm’s decision to invest.
He added: “What impressed us most is Sezzle's execution and sense of purpose.”