Special Report: North American market Afterpay competitor Sezzle signed up 450 per cent more customers during the Black Friday weekend after tripling its credit facility.

North American market buy now, pay later credit provider Sezzle (ASX:SZL) lit up its commercialisation strategy during the Black Friday long weekend, signing up 36,000 new active customers during the four-day shopping event.

Sezzle powered up its Black Friday-to-Cyber Monday recruitment by 28,000 customers, or 450 per cent, when compared to its 2018 performance during the sales event.

Underlying merchant sales (UMS) were up a significant 402 per cent to $US11.3m ($16.5m), when compared to the festive season weekend last year.

Sezzle executive chairman and CEO Charlie Youakim noted the company’s sign-up achievement would provide a favourable backdrop for December quarter 2019 performance for the Minnesota-based company.

“We enjoyed very robust new customer additions for just four days of sales, and the UMS of $US11.3m during this brief sales frenzy equates to more than 7 per cent of Sezzle’s UMS in the entire last four quarters,” Youakim said.

“The decline in the use of credit cards and heavy utilisation of mobile phones during the iconic BF/CM sales event provides further compelling evidence of the growing preference by consumers for alternative payment methods such as Sezzle.”

Sezzle may post 2019 calendar year performance in late January 2020 after it releases its December 2019 quarter results.

The Minneapolis company listed on the ASX five months ago and has achieved a UMS of $US157.5m for the 12 months to September 30, 2019.

Credit to grow

Sezzle is leaning into a growth pattern, tripling the size of its funding facility to $US100m in an arrangement announced last week.

Youakim told Stockhead the company had “tremendous growth metrics” since listing on the ASX.

“I think it’s even ahead of expectations that we set for ourselves, which is why we re-upped our credit line,” he said.

The increased credit capacity allows the US and Canadian credit provider to reduce its costs and better target large retailers.

“It was a win-win for us, because we increased capacity, we reduced our cost of funding, and then we make ourselves a bit more attractive to retailers that are larger, because they know that we can support them,” Youakim said.

Sezzle’s end-clients can use its credit in more than 7,500 online and physical stores including Bodega, Jessica Simpson and Akira as well as with integrations on major e-commerce sites like Shopify, Salesforce, WooCommerce and Visa’s Cybersource.

Commercialisation conscious

Youakim said a focus on partnerships was a core component of the company’s commercialisation strategy.

“The pitch is strong, to both consumers and for retailers,” Youakim said. “The retailer pitch is, by adding us, we’re going to reduce friction in your checkout by increasing purchasing power, and also by making it easy to repeat.

“Our subsequent checkouts are really, really fast.”

The company understands ease-of-use is a key component of its expansion.

Youakim said the company was all about “making it very, very easy for small and medium-sized retailers to add us as a payment method.”

Building partnerships and facilitating easy integrations into extra ecommerce platforms is a way for the company to ensure it can enjoy better margins as it collects increased revenues.

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This story was developed in collaboration with Sezzle, a Stockhead advertiser at the time of publishing. This story does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.

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