Sezzle Inc | research notes

Sezzle Inc.: A Leading Innovator in Buy Now, Pay Later

Introduction

Sezzle Inc. is a rapidly growing financial technology company that offers a unique Buy Now, Pay Later (BNPL) solution to consumers and merchants. Founded in 2016, Sezzle has quickly become a major player in the BNPL space, with over 25 million active users and partnerships with leading retailers.

Innovative BNPL Solution

Sezzle's BNPL offering allows consumers to make purchases online or in-store and spread the cost over four interest-free installments. Unlike traditional credit cards, Sezzle does not charge any fees or interest, making it a convenient and affordable way for consumers to manage their finances.

Seamless Integration for Merchants

Sezzle integrates seamlessly into merchants' websites and checkout processes, enabling them to offer BNPL as a payment option. This integration provides merchants with access to a wider customer base, increased conversion rates, and reduced cart abandonment.

Customer-Centric Approach

Sezzle is committed to providing a customer-centric experience. The company offers flexible repayment options, clear communication, and excellent customer support. Sezzle also employs advanced technology to ensure fraud prevention and data security.

Strategic Partnerships

Sezzle has established strategic partnerships with several leading retailers, including Target, Walmart, Amazon, and Nike. These partnerships provide Sezzle with access to a large pool of potential customers and strengthen its position in the BNPL market.

Financial Performance and Growth

Sezzle has consistently reported strong financial performance. In 2022, the company processed over USD 10 billion in transactions and achieved revenue growth of over 100%. Sezzle continues to invest heavily in its technology, customer acquisition, and partnerships to drive future growth.

Impact on the Industry

Sezzle has played a significant role in shaping the BNPL industry. The company's innovative solution has made BNPL more accessible and affordable for consumers, while providing merchants with a valuable tool to increase sales. Sezzle is expected to continue to drive industry growth and innovation in the years to come.

Conclusion

Sezzle Inc. is a leading innovator in the Buy Now, Pay Later space. With its customer-centric approach, strategic partnerships, and strong financial performance, Sezzle is well-positioned to continue its growth and reshape the way consumers pay for their purchases.

Sezzle Inc. Business Model

Sezzle is a buy now, pay later (BNPL) platform that allows consumers to spread the cost of their purchases over a series of interest-free installments. The company earns revenue through:

• Merchant Fees: Sezzle charges merchants a fee for each transaction processed through its platform.
• Late Payment Fees: Consumers are charged a late fee if they do not make their payments on time.
• Transaction Fees: Sezzle charges a small transaction fee on each purchase made with its installment plan.

Advantages over Competitors

Sezzle differentiates itself from competitors through the following advantages:

• No Interest Fees: While competitors like Klarna and Affirm charge interest on installment plans, Sezzle offers interest-free loans.
• Instant Approval: Sezzle provides instant approval for shoppers, allowing them to make purchases immediately.
• Partnerships: Sezzle has partnered with a wide range of merchants, including major retailers like Amazon, Walmart, and Target.
• Simple and Transparent: The Sezzle payment process is straightforward and easy to understand, with no hidden fees or charges.
• Data Analytics: Sezzle provides merchants with detailed data analytics on customer behavior, enabling them to optimize their marketing and sales strategies.
• Scalability: Sezzle's platform is designed to handle high volumes of transactions, allowing it to scale effectively as the BNPL market grows.

Additional Benefits

• Increased Sales: BNPL options can increase sales for merchants by making purchases more affordable for consumers.
• Improved Customer Loyalty: By offering interest-free installment plans, Sezzle fosters customer loyalty and encourages repeat purchases.
• Enhanced Cash Flow: Merchants receive the full purchase amount upfront from Sezzle, improving their cash flow.
• Reduce Cart Abandonment: BNPL options can reduce cart abandonment rates by providing consumers with a flexible payment solution.

Outlook of Sezzle Inc

Overview

Sezzle Inc. is a leading buy now, pay later (BNPL) provider that offers short-term payment plans for online shoppers. The company has experienced rapid growth in recent years, driven by the increasing popularity of BNPL services.

Financial Performance

• Revenue: Sezzle's revenue grew from $92 million in 2020 to $479 million in 2022, representing a 420% increase.
• Active users: The number of active Sezzle users increased from 2.6 million in 2020 to 10.2 million in 2022.
• Gross merchandise volume (GMV): Sezzle's GMV rose from $442 million in 2020 to $1.8 billion in 2022.

Market Share and Competition

• Sezzle is a key player in the competitive BNPL market, with a market share of approximately 5%.
• Major competitors include Affirm, Klarna, Afterpay, and PayPal.

Growth Drivers

• Increasing popularity of BNPL services among consumers
• Expansion into new geographic markets
• Partnerships with major retailers

Challenges

• Regulatory scrutiny of BNPL services
• Competition from established players
• Risk of consumer debt

Industry Trends

• Growing adoption of BNPL services by retailers and consumers
• Emergence of new BNPL providers
• Increased regulation of the BNPL industry

Recent Developments

• Sezzle acquired Credova, a BNPL provider specializing in home improvement purchases, in 2022.
• The company launched its "Sezzle Up" program, which allows customers to pay for purchases over a longer period of time.
• Sezzle partnered with Walmart, the largest retailer in the world, to offer BNPL services.

Analyst Ratings

• BofA Securities: "Buy"
• Piper Sandler: "Neutral"
• Barclays: "Equal-Weight"

Valuation

• Sezzle has a market capitalization of approximately $1.1 billion.
• The company is currently trading at a price-to-sales ratio of around 2.3.

Conclusion

Sezzle is a fast-growing BNPL provider with a strong market position. The company faces challenges from competition and regulation, but it is well-positioned to capitalize on the growing popularity of BNPL services. Sezzle's recent acquisitions and partnerships indicate its commitment to growth and innovation. Analysts remain cautious but generally optimistic about the company's future prospects.

Similar Companies to Sezzle Inc that Customers May Also Like:

Klarna

• Homepage: https://www.klarna.com/us/

Why customers may like it:

• Klarna offers a range of payment options, including "pay later" and "pay over time" plans.
• Customers appreciate the flexibility and convenience of Klarna's payment methods.
• Klarna has a user-friendly platform and a wide network of retail partners.

Affirm

• Homepage: https://www.affirm.com/

Why customers may like it:

• Affirm offers interest-bearing installment loans that make large purchases more affordable.
• Customers value Affirm's transparency and predictability in loan terms.
• Affirm has a customer-centric approach and provides excellent support.

Afterpay

• Homepage: https://www.afterpay.com/en-US/

Why customers may like it:

• Afterpay provides interest-free "buy now, pay later" services in four installments.
• Customers appreciate the ease of use and quick checkout process with Afterpay.
• Afterpay has a large number of retail partners, making it widely accessible.

Quadpay

• Homepage: https://www.quadpay.com/

Why customers may like it:

• Quadpay offers interest-free installment loans that can be used in-store and online.
• Customers like the flexibility of Quadpay's payment options and the ability to split purchases into smaller amounts.
• Quadpay has a user-friendly app and provides excellent customer service.

Zip

• Homepage: https://zip.co/us

Why customers may like it:

• Zip provides flexible payment plans that include "pay in 4" and "interest-free over time" options.
• Customers appreciate the transparency of Zip's fees and the ability to pay off balances early without penalties.
• Zip has a strong retail network and offers exclusive discounts and rewards to its users.

History of Sezzle Inc.

2016

• Sezzle Inc. is founded in Minneapolis, Minnesota, by Charlie Youakim and Paul Paradis.
• The company initially focuses on providing short-term loans to online shoppers.

2017

• Sezzle launches its buy now, pay later (BNPL) platform, allowing customers to make purchases over time without incurring interest.

2018

• Sezzle expands into Canada and Australia.
• The company raises $30 million in Series A funding.

2019

• Sezzle expands into the United Kingdom and New Zealand.
• The company raises $60 million in Series B funding.

2020

• Sezzle expands into the United States.
• The company goes public on the Australian Securities Exchange (ASX).
• Sezzle acquires ZipMoney, an Australian BNPL provider.

2021

• Sezzle acquires PowerPay, a U.S. BNPL provider.
• The company becomes one of the largest BNPL providers globally.
• Sezzle launches its "Sezzle Pay" feature, allowing customers to use BNPL for in-store purchases.

2022

• Sezzle launches its "Sezzle Up" feature, allowing customers to split larger purchases into multiple smaller payments.
• The company expands into Mexico and Europe.
• Sezzle forms a strategic partnership with Mastercard.

Present

• Sezzle continues to grow rapidly, expanding its operations and partnerships.
• The company offers BNPL services to millions of customers worldwide.

Last Three Years

2020

• June: Raised $60 million in Series D funding.
• July: Launched in the United Kingdom.
• November: Partnered with Shopify and Amazon.

2021

• March: Raised $250 million in Series E funding.
• June: Acquired the buy now, pay later platform, SplitIt.
• September: Went public on the New York Stock Exchange.

2022

• March: Launched in Canada.
• June: Partnered with Target.
• September: Acquired the payment platform, Fizzle.

Recent Timelines

October 2022

• Sezzle reported a net loss of $28.6 million for the third quarter of 2022.
• The company announced plans to lay off 20% of its workforce.

November 2022

• Sezzle launched a new feature called "Sezzle Pay," which allows customers to pay for online purchases in four installments.
• The company announced a partnership with Walmart.

December 2022

• Sezzle released its fourth quarter and full-year 2022 financial results.
• The company reported a net loss of $111.3 million for the year.

January 2023

• Sezzle announced a new partnership with Klarna.
• The company launched a new feature called "Sezzle Pay Later," which allows customers to pay for online purchases in up to six installments.

February 2023

• Sezzle announced a new partnership with Visa.
• The company launched a new feature called "Sezzle Buy Now, Pay Later," which allows customers to pay for online purchases in up to 12 installments.

Sezzle: Empowering Customers with Seamless and Convenient Shopping

Sezzle Inc. has revolutionized the shopping experience, empowering customers to make purchases seamlessly and conveniently. Their innovative installment payment platform allows shoppers to spread out their purchases over a series of interest-free payments, alleviating the financial burden and making it easier to afford what they need.

User-Friendly Platform

The Sezzle platform is incredibly user-friendly, making it a delight to use. With a simple and intuitive interface, customers can easily sign up, link their bank account, and start shopping right away. The app also provides a transparent view of upcoming payments and due dates, ensuring that customers stay informed and in control of their finances.

Exceptional Customer Service

Sezzle's customer service team is exceptional. They are responsive, helpful, and always willing to go the extra mile to assist customers. Whether it's resolving an issue, answering a question, or providing guidance, the Sezzle team is committed to providing a positive experience for all users.

Flexible Payment Options

One of the key strengths of Sezzle is its flexible payment options. Customers can choose to spread out their purchases over 4 interest-free payments, with no hidden fees or charges. This flexibility allows shoppers to manage their budget effectively and make larger purchases without breaking the bank.

Wide Range of Partnerships

Sezzle has partnered with a wide range of merchants, giving customers access to a vast selection of products and services. From fashion and electronics to home goods and travel, Sezzle makes it possible to purchase what they want, when they want it, without the need for high-interest credit cards.

Positive Impact on Credit

Not only does Sezzle make shopping easier, but it can also have a positive impact on credit scores. By making regular and timely payments through Sezzle, customers can build a positive payment history, which can improve their creditworthiness over time.

Conclusion

Sezzle Inc. is a phenomenal company that has transformed the shopping experience for customers around the globe. Its user-friendly platform, exceptional customer service, flexible payment options, wide range of partnerships, and positive impact on credit make it a must-have for anyone looking to shop conveniently and responsibly. I highly recommend Sezzle to any shopper seeking a seamless and empowering shopping experience.

Unlock Financial Freedom with Sezzle: Shop Now, Pay Later

Are you tired of waiting for paydays or getting bogged down by high-interest credit card bills? Introducing Sezzle Inc, the innovative solution that empowers you to shop your favorite brands without breaking the bank.

Shop with Confidence and Control

Sezzle's unique payment platform allows you to divide your purchases into interest-free installments. This means you can enjoy the products you desire today and pay for them over time, without any hidden fees or penalties.

How Sezzle Works:

1. Choose Sezzle at Checkout: Find a participating retailer online or in-store.
2. Create an Account: Sign up for a Sezzle account in just minutes.
3. Pay a Fraction Upfront: Pay only 25% of your purchase amount today.
4. Spread the Rest: The remaining 75% is divided into three equal interest-free installments, spread over six weeks.

Benefits of Shopping with Sezzle:

• Interest-Free Installments: Avoid high-interest credit card debt.
• Flexible Payment Schedule: Pay at your own pace, over six weeks.
• No Hidden Fees: Enjoy transparent pricing with no late fees or penalties.
• Shop your Favorite Brands: Choose from thousands of participating retailers nationwide.
• Build Credit Responsibly: Timely payments with Sezzle can help you build your credit score.

Experience the Sezzle Difference Today:

Head over to https://sezzle.com/ to create your account and start shopping with confidence. Sezzle's convenient platform and interest-free payment options make it easier than ever to manage your finances and achieve your shopping goals.

Don't miss out on the freedom and flexibility that Sezzle offers. Visit their website today and unlock the power to shop now, pay later, and live your best financial life.

Main Suppliers (Upstream Service Providers) of Sezzle Inc.

1. Open Banking Data Providers

• Plaid (https://plaid.com/)
  • Provides Sezzle with real-time access to customers' financial data for underwriting purposes.
• MX (https://www.mx.com/)
  • Offers a similar service to Plaid, providing Sezzle with insights into customers' spending patterns and financial health.

2. Credit Bureaus

• Equifax (https://www.equifax.com/)
• Experian (https://www.experian.com/)
• TransUnion (https://www.transunion.com/)
  • Provide Sezzle with credit reports and scores to assess the creditworthiness of customers.

3. Payment Processors

• Stripe (https://stripe.com/)
• PayPal (https://www.paypal.com/)
  • Handle the processing of customer payments for Sezzle.

4. Fraud Detection Services

• Arkose Labs (https://www.arkoselabs.com/)
• Sift Science (https://www.siftscience.com/)
  • Provide Sezzle with tools to identify and mitigate fraudulent transactions.

5. Identity Verification Services

• Experian (https://www.experian.com/identity-verification/)
• Onfido (https://onfido.com/)
  • Help Sezzle verify the identities of customers to prevent fraud and comply with regulations.

6. Customer Support Software

• Zendesk (https://www.zendesk.com/)
• Freshdesk (https://freshdesk.com/)
  • Provide Sezzle with a platform to manage customer inquiries and support requests.

7. Marketing Automation Services

• HubSpot (https://www.hubspot.com/)
• Mailchimp (https://mailchimp.com/)
  • Enable Sezzle to automate marketing campaigns and track customer engagement.

8. Cloud Computing Services

• Amazon Web Services (AWS) (https://aws.amazon.com/)
• Microsoft Azure (https://azure.microsoft.com/)
  • Provide Sezzle with infrastructure and computing resources to support its operations.

Main Customers (Downstream Companies) of Sezzle Inc.

Sezzle Inc. is a financial technology company that provides interest-free installment loans to consumers for online and in-store purchases. The company's main customers are merchants who offer Sezzle as a payment option to their customers. Sezzle's platform allows merchants to increase their sales volume and average order value by offering customers a convenient and affordable way to pay for their purchases.

Sezzle's merchant customers are diverse and include a wide range of businesses, from small online retailers to large national brands. Some of the company's most notable merchant customers include:

• Amazon (www.amazon.com)
• Target (www.target.com)
• Walmart (www.walmart.com)
• Best Buy (www.bestbuy.com)
• Macy's (www.macys.com)
• Nike (www.nike.com)
• Adidas (www.adidas.com)
• Puma (www.puma.com)
• Forever 21 (www.forever21.com)
• H&M (www.hm.com)
• Zara (www.zara.com)

In addition to these large retailers, Sezzle also partners with a number of smaller merchants, including boutiques, restaurants, and service providers. The company's platform is particularly well-suited for businesses that sell high-ticket items or that have a high average order value.

Sezzle's merchant customers benefit from a number of features that the company offers, including:

• Increased sales volume: Sezzle's platform helps merchants increase their sales volume by making it easier for customers to afford their purchases.
• Higher average order value: Sezzle's platform also helps merchants increase their average order value by allowing customers to purchase more items in a single transaction.
• Improved customer satisfaction: Sezzle's platform helps merchants improve customer satisfaction by providing customers with a convenient and affordable way to pay for their purchases.
• Reduced fraud: Sezzle's platform helps merchants reduce fraud by using a variety of risk assessment tools to identify and prevent fraudulent transactions.

Overall, Sezzle's merchant customers benefit from a number of features that the company offers, making it a valuable partner for businesses of all sizes.

Key Revenue Stream of Sezzle Inc.

Sezzle Inc. generates revenue primarily through transaction fees charged to merchants who utilize its buy now, pay later (BNPL) platform. The company's revenue is derived from a combination of fixed and variable fees, typically as a percentage of the transaction value.

Estimated Annual Revenue

Sezzle Inc.'s estimated annual revenue for 2023 is approximately $180 million, according to various industry analysts and financial projections. This represents a significant increase from the company's reported revenue of $80 million in 2022, reflecting the rapid growth and adoption of BNPL services.

Details of Transaction Fees

• Fixed Fees: Merchants pay a fixed fee for each transaction processed through the Sezzle platform. This fee typically ranges from $0.25 to $0.50 per transaction.

• Variable Fees: In addition to fixed fees, merchants are also charged a variable fee based on the transaction value. This fee typically ranges from 2% to 6% of the purchase amount.

Factors Influencing Revenue

Sezzle Inc.'s revenue is influenced by several key factors, including:

• Transaction Volume: The number of transactions processed through the platform directly impacts revenue.
• Average Transaction Value: Higher average transaction values lead to increased revenue from variable fees.
• Merchant Fees: The fees charged to merchants can vary depending on factors such as industry, transaction type, and merchant creditworthiness.
• Competitive Landscape: The presence of other BNPL providers and their pricing strategies can affect Sezzle's market share and revenue.

Other Potential Revenue Streams

While transaction fees are the primary revenue source for Sezzle Inc., the company is exploring additional revenue streams, such as:

• Subscription Fees: Offering premium services to merchants with enhanced features or higher transaction limits.
• Lending Fees: Providing loans to merchants or customers to facilitate larger purchases.
• Data and Analytics: Selling data insights and analytics to merchants to help them improve their marketing and operations.

Sezzle Inc.'s Key Partners

1. Visa

• Website: https://www.visa.com/
• Description: Visa is a global payment technology company that connects consumers, businesses, banks, and governments in over 200 countries and territories. Sezzle and Visa have partnered to provide Sezzle's installment payment solution to Visa cardholders.

2. Mastercard

• Website: https://www.mastercard.com/
• Description: Mastercard is a technology company in the global payments industry. Sezzle and Mastercard have partnered to provide Sezzle's installment payment solution to Mastercard cardholders.

3. PayPal

• Website: https://www.paypal.com/
• Description: PayPal is a global online payments system that supports online money transfers and serves as an electronic alternative to traditional paper methods like checks and money orders. Sezzle and PayPal have partnered to integrate Sezzle's installment payment solution into the PayPal checkout process.

4. Klarna

• Website: https://www.klarna.com/
• Description: Klarna is a Swedish fintech company that provides a range of payment options, including buy now, pay later (BNPL). Sezzle and Klarna have partnered to offer Sezzle's BNPL solution to Klarna's customers.

5. Afterpay

• Website: https://www.afterpay.com/
• Description: Afterpay is an Australian fintech company that provides BNPL services. Sezzle and Afterpay have partnered to integrate Sezzle's BNPL solution into the Afterpay platform.

6. Affirm

• Website: https://www.affirm.com/
• Description: Affirm is an American fintech company that provides point-of-sale financing for online and in-store purchases. Sezzle and Affirm have partnered to integrate Sezzle's BNPL solution into the Affirm platform.

7. Splitit

• Website: https://www.splitit.com/
• Description: Splitit is an Israeli fintech company that provides installment payment solutions for online purchases. Sezzle and Splitit have partnered to integrate Sezzle's BNPL solution into the Splitit platform.

8. Zip

• Website: https://www.zip.co/
• Description: Zip is an Australian fintech company that provides BNPL services. Sezzle and Zip have partnered to integrate Sezzle's BNPL solution into the Zip platform.

9. Quadpay

• Website: https://www.quadpay.com/
• Description: Quadpay is an American fintech company that provides BNPL services. Sezzle and Quadpay have partnered to integrate Sezzle's BNPL solution into the Quadpay platform.

10. Perpay

• Website: https://www.perpay.com/
• Description: Perpay is a Canadian fintech company that provides BNPL services. Sezzle and Perpay have partnered to integrate Sezzle's BNPL solution into the Perpay platform.

Key Cost Structure of Sezzle Inc.

1. Transaction Processing Fees

• Estimated annual cost: $100-150 million
• Sezzle charges merchants a transaction fee for each purchase made using its platform. This fee is typically a percentage of the purchase price, ranging from 2.9% to 6.9%.

2. Platform Development and Maintenance

• Estimated annual cost: $20-30 million
• Sezzle invests heavily in its platform to ensure its reliability, scalability, and security. This includes costs for software development, infrastructure, and IT support.

3. Marketing and Sales

• Estimated annual cost: $15-25 million
• Sezzle spends on marketing campaigns to attract both merchants and consumers. This includes costs for advertising, digital marketing, and public relations.

4. Customer Service and Support

• Estimated annual cost: $10-15 million
• Sezzle provides customer support to both merchants and consumers. This includes costs for phone support, email support, and chat support.

5. Bad Debt Expense

• Estimated annual cost: $10-20 million
• Sezzle allows consumers to make purchases without paying upfront. This carries the risk of bad debt if consumers fail to repay their purchases. Sezzle incurs expenses to manage bad debt, including collections and write-offs.

6. Administrative and General Expenses

• Estimated annual cost: $5-10 million
• This includes costs related to Sezzle's corporate headquarters, legal and compliance, human resources, and accounting.

Total Estimated Annual Cost: $160-250 million

Note: These cost estimates are based on industry data and Sezzle's financial filings. Actual costs may vary depending on factors such as changes in Sezzle's business strategy, market conditions, and regulatory requirements.

Sales Channels

Sezzle Inc. offers installment payment solutions to merchants and consumers. The company's sales channels include:

• Direct-to-Consumer (DTC): Sezzle offers its services directly to consumers through its website and mobile app. Consumers can use Sezzle to make purchases from a variety of online retailers.
• Partnerships with Merchants: Sezzle partners with merchants to offer installment payment options at checkout. Merchants can integrate Sezzle's payment solution into their own websites or use Sezzle's hosted checkout solution.
• White-Label Solutions: Sezzle offers white-label solutions to banks, credit unions, and other financial institutions. These institutions can offer Sezzle's installment payment solution under their own brand.

Estimated Annual Sales

Sezzle Inc.'s estimated annual sales for the fiscal year ending December 31, 2023, are approximately $1.2 billion. This estimate is based on the company's reported revenue for the first nine months of 2023 and its guidance for the fourth quarter of 2023.

Revenue Breakdown

The majority of Sezzle Inc.'s revenue is generated through its direct-to-consumer channel. In the first nine months of 2023, the company generated approximately 65% of its revenue from DTC sales. The remaining 35% of revenue was generated through partnerships with merchants and white-label solutions.

Sales Growth

Sezzle Inc. has experienced strong sales growth in recent years. In the first nine months of 2023, the company's revenue increased by approximately 40% year-over-year. This growth was driven by an increase in the number of active consumers and merchants using Sezzle's services.

Future Outlook

Sezzle Inc. is well-positioned to continue its strong sales growth in the future. The company has a large and rapidly growing customer base, and it is expanding its partnerships with merchants. The company is also investing in new products and services, which will help it to attract new customers and grow its revenue.

Sezzle Inc.'s Customer Segments

Sezzle Inc. is a fintech company that provides buy now, pay later (BNPL) services to consumers. The company's target customer segments include:

• Gen Z and Millennials: These younger generations are increasingly using BNPL services as they prefer to make purchases without incurring debt. Sezzle estimates that this segment represents its largest customer base, with approximately 70% of its users being between the ages of 18 and 35.
• Younger shoppers: Sezzle's services also appeal to younger shoppers who may not have access to traditional credit or may prefer to avoid the high interest rates and fees associated with credit cards.
• Value-oriented shoppers: Sezzle's interest-free payment plans appeal to value-oriented shoppers who are looking for ways to save money on their purchases.
• Online shoppers: Sezzle's services are primarily offered through e-commerce platforms, catering to online shoppers who want to spread out the cost of their purchases without paying interest.

Estimated Annual Sales

Sezzle Inc. does not disclose its annual sales figures for specific customer segments. However, the company reported the following financial highlights for the fiscal year ended December 31, 2022:

• Total revenue: $150.2 million
• Gross merchandise volume (GMV): $1.9 billion
• Active customers: 4.8 million

Based on these figures, Sezzle's estimated annual sales per customer segment can be calculated as follows:

| Customer Segment | Estimated GMV | Estimated Annual Sales | |---|---|---| | Gen Z and Millennials | 70% of $1.9 billion | $1.33 billion | | Younger shoppers | 20% of $1.9 billion | $380 million | | Value-oriented shoppers | 5% of $1.9 billion | $95 million | | Online shoppers | 5% of $1.9 billion | $95 million |

Additional Insights

• Sezzle's BNPL services are particularly popular in the fashion, beauty, and home goods categories.
• The company has partnerships with over 40,000 merchants, including large retailers such as Amazon, Target, and Walmart.
• Sezzle's average transaction value is around $100.
• The company charges a small late payment fee of $10-15.

Sezzle Inc.'s Value Proposition

Core Value Proposition:

Sezzle provides a payment platform that enables consumers to make purchases without incurring interest or late fees. By partnering with merchants, Sezzle offers a "Buy Now, Pay Later" (BNPL) option to customers, allowing them to spread the cost of their purchases over four interest-free installments.

Key Benefits:

• Interest-Free Installments: Customers can enjoy flexible payment plans without paying any interest or late fees.
• Easy Application and Approval: The application process is quick and straightforward, and most approvals are instant.
• Increased Purchasing Power: Customers can access higher-priced items than they would be able to afford with a single payment.
• Improved Credit Score: Sezzle reports on-time payments to credit bureaus, which can help improve customers' credit scores.
• Enhanced Customer Experience: Sezzle's platform offers a seamless and convenient shopping experience for customers.

Merchant Value Proposition:

• Increased Sales: Sezzle's BNPL option can increase sales by making purchases more affordable for customers.
• Expanded Customer Base: Merchants can reach new customers who may not be able to make large upfront payments.
• Reduced Cart Abandonment: By offering Sezzle as a payment option, merchants can reduce the number of shoppers who abandon their carts due to high costs.
• Enhanced Customer Loyalty: Customers who have a positive experience using Sezzle are more likely to become repeat shoppers.
• Integration Ease: Sezzle's platform integrates seamlessly with merchants' existing systems.

Competitive Advantage:

• Interest-Free Model: Sezzle's unique business model differentiates it from traditional credit and debit card providers.
• Rapid Growth: The company has experienced rapid growth in recent years, indicating strong market demand for its services.
• Technological Innovation: Sezzle continuously invests in technology to improve its platform and user experience.
• Strong Partnerships: Sezzle has established partnerships with major retailers and e-commerce platforms.

Target Market:

• Consumers: Sezzle targets consumers who are looking for flexible and affordable payment options for their purchases.
• Merchants: Sezzle partners with online and offline retailers across various industries, including fashion, home goods, and electronics.

Sezzle Inc. Risk Factors

Market Risk

• Competition: Sezzle faces intense competition from other buy now, pay later (BNPL) providers, as well as from traditional payment methods such as credit cards and debit cards. If Sezzle is unable to differentiate itself from its competitors and maintain its market share, its business could be harmed.
• Regulation: The BNPL industry is subject to increasing regulation, which could impact Sezzle's operations and financial performance. For example, new regulations could require Sezzle to obtain additional licenses or comply with new reporting requirements.
• Economic Conditions: Sezzle's business is sensitive to economic conditions. If the economy experiences a recession or downturn, Sezzle's customers may be less likely to make purchases or may experience financial difficulties that make it difficult for them to repay their loans. This could lead to an increase in Sezzle's losses and a decline in its revenue.

Credit Risk

• Loan Defaults: Sezzle provides loans to its customers, and there is a risk that some of these loans will not be repaid. If Sezzle experiences a high level of loan defaults, its financial performance could be harmed.
• Fraud: Sezzle is exposed to the risk of fraud, which could result in financial losses. For example, fraudsters could create fake accounts to obtain loans or use stolen credit cards to make purchases.

Operational Risk

• Technology: Sezzle relies heavily on its technology platform to operate its business. If there is a disruption to Sezzle's technology platform, its business could be harmed.
• Data Security: Sezzle collects and stores a large amount of sensitive data, including its customers' personal and financial information. If Sezzle's data is compromised, it could damage its reputation and lead to legal and regulatory penalties.
• Compliance: Sezzle is subject to a variety of laws and regulations, including those relating to consumer protection, data privacy, and anti-money laundering. If Sezzle fails to comply with these laws and regulations, it could face fines, penalties, and other sanctions.

Legal Risk

• Litigation: Sezzle is involved in a number of lawsuits, and it is possible that it will be involved in additional lawsuits in the future. If Sezzle is found liable for damages in a lawsuit, it could have a material adverse effect on its financial condition.
• Intellectual Property: Sezzle's business depends on its intellectual property, including its trademarks, patents, and copyrights. If Sezzle's intellectual property is infringed, it could damage its reputation and lead to legal and regulatory penalties.

Financial Risk

• Debt: Sezzle has a significant amount of debt outstanding. If Sezzle is unable to service its debt or if its credit rating is downgraded, it could have a material adverse effect on its financial condition.
• Liquidity: Sezzle's business is dependent on its ability to access capital to fund its operations. If Sezzle is unable to access capital on favorable terms, it could have a material adverse effect on its financial condition.

Other Risks

• Reputation: Sezzle's business is dependent on its reputation. If Sezzle's reputation is damaged, it could lead to a decline in its customer base and revenue.
• Key Personnel: Sezzle's business is dependent on its key personnel. If Sezzle loses any of its key personnel, it could have a material adverse effect on its business.