Sezzle Inc. (SEZL)

Sezzle Inc. is a purpose-driven digital payments company, launched in 2017, that offers consumers a flexible alternative to traditional credit. Its platform extends credit at the point of sale so shoppers receive merchandise immediately and pay in installments. Sezzle is a Delaware public benefit corporation (since June 2020) and a Certified B Corporation (since March 2021). It operates in the United States and Canada and is winding down operations in India and certain countries in Europe.

The flagship product is "pay-in-four," in which a consumer pays 25% up front and the rest every two weeks over six weeks. It is generally free to consumers who pay on time with a bank account. Other offerings include pay-in-full, pay-in-two, and customized installment terms with select enterprise merchants. The Sezzle Virtual Card, issued by Sutton Bank under a Visa license, works in-store and online, including with non-integrated merchants. Two paid subscriptions, Sezzle Premium (launched 2022) and Sezzle Anywhere (2023), widen merchant access and add benefits. Sezzle On-Demand (2024) lets non-subscribers use the platform at any merchant for a finance charge. Sezzle Up is an opt-in feature that reports payments to help consumers build credit, and Payment Streaks (2024) rewards on-time payments. Through third-party lenders, consumers can access longer-term loans of up to $15,000 and 60 months, for which Sezzle earns referral fees and does not originate or hold the loans. Sezzle also facilitates merchant working capital loans of up to $150,000 through Sezzle Capital, issued by a third-party lender.

Sezzle focuses on young, tech-savvy consumers. About 78% of its Active Consumers at December 31, 2024 were Gen Z or Millennials (ages 18-47), who use credit cards less and often lack access to traditional credit. Directly integrated merchants fall into two segments: small-to-medium-sized businesses (under $500 million in annual gross sales, historically the largest segment, including direct-to-consumer brands) and enterprise merchants (over $500 million). Merchants integrate through pre-built e-commerce widgets or an API and can typically go live within a day. No external party accounted for 10% or more of revenue in 2024 or 2023, though a significant portion of volume comes through a limited number of scaled e-commerce platforms. Revenue comes mainly from merchant and partner income (37% of 2024 revenue, versus 62% in 2023) and consumer subscriptions (30%, versus 19%). A smaller share comes from consumer fees such as late, failed-payment and rescheduling fees. Sezzle charges consumers no interest.

Sezzle bears consumer payment processing costs and credit losses, and manages this risk with proprietary underwriting and fraud systems. It funds receivables mainly through a $150 million revolving credit facility and merchant payables, including a Delayed Settlement Incentive Program. Revenue and volume are strongest in the fourth quarter, with higher charge-offs. Its main competitors are other buy-now-pay-later providers, including Affirm, Afterpay, Klarna, PayPal Pay Later and Zip in the U.S., and Klarna, Affirm and Afterpay in Canada. At December 31, 2024, it had 408 employees, none unionized.