Sezzle planning to double BNPL customers with new $250m debt facility

With plans in motion to secure more of the buy-now-pay-later market in North America, Sezzle (ASX: SZL) will be able to extend its BNPL services thanks to a new USD $250 million credit warehouse from Goldman Sachs Bank USA and Bastion Funding.

The new debt warehouse facility will replace Sezzle’s existing $100m facility while extending its maturity from May 2022 to June 2023 with the Company reporting that adjusted terms of the facility will provide a positive effect on Sezzle’s net transaction margin over time.

“The committed facility from Goldman Sachs and Bastion will play a critical role in the growth and capital management strategies of Sezzle for 2021 and beyond,” said Sezzle Chief Financial Officer, Karen Hartje.

“We are happy to be working with them, as we are experiencing significant growth in the US and Canada. We have never been in a stronger liquidity position in which to achieve our growth plans while lower our funding costs.”

Unlike other ASX-listed BNPL operators, Sezzle’s services are primarily targeted towards North American merchants and customers.

For the Quarter ending 31 December 2020, Sezzle reported AUD $419m in underlying merchant sales which represented a 40.6% increase from the September Quarter. At the same time, the Company reported to have more than 5 million customers, of which 2.2m were active.

Direct marketing is set to play a big role in Sezzle’s growth projects with the BNPL operator having recently completed its first large-scale marketing campaign – Save the Holiday. The campaign was driven by social media, encouraging Americans to download the Sezzle app to increase their purchasing power over the Christmas period.

Sezzle has also recently integrated a widget into popular eCommerce platform Wix, enabling merchants to offer Sezzle’s BNPL option through online stores.