Sezzle Gains $100 Million Funding Facility, Share Price Soars (ASX:SZL)

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This morning, Sezzle Inc [ASX:SZL] released their first update since their September quarterly report.

The BNPL (buy now, pay later) company has secured a US$100 million funding facility, which more than triple’s their prior US$30 million credit facility.

Sezzle’s share price had climbed 4.167% by midday, to $2.50.

This is still 20 cents short from the company’s apparent resistance level of $2.70:

Sezzle’s share price

Source: Market Index

You can check out my colleague’s discussion of this resistance level here.

Could this new funding facility push the share price passed this resistance?

Download now: Three ASX fintech stocks taking on the banks (and winning).

Sezzle now set to hold larger merchant load

The new facility is part of a syndicate agreement among three US credit providers: Atalaya Capital Management, Bastion Consumer Lending and Hudson Cove Capital Management.

Sezzle will use it to pay back merchant clients in advance of the instalment payments made by end customers who use the Sezzle payment platform.

This means the company can expand in the North American sector, as they can now afford to take on more merchants.

Executive Chairman and CEO, Charlie Youakim said of the agreement:

This substantial increase in liquidity provided by our partners will underpin Sezzle’s capacity to grow its offering to consumers and thereby aggressively grow our Underlying Merchant Sales [UMS]’.

In their Q3 2019 update, Sezzle’s UMS sat at $68.8 million, up 64.2% from the June quarter.

This was the largest single quarterly increase in UMS in the company’s history.

It will be interesting to see how this new funding facility will impact Q4 results.

It likely won’t be until these results are released that we see any test of the resistance level.

Developing market sectors merging

In other news, last week Sezzle partnered with Medical Marijuana Inc’s subsidiary, HempMeds, to provide an instalment payment option for cannabidiol products.

Medical Marijuana, Inc CEO Dr Stuart Titus sees the potential in such mergers between evolving market sectors:

In a study conducted at the University of California, San Diego, researchers found that online search volume for CBD in the U.S. increased 160.4 percent in 2018 compared with 2017 and is expected to increase by 117.7 percent in 2019 compared to 2018.

With the number of new consumers becoming interested in purchasing CBD, we believe that Sezzle is a great opportunity to make our CBD products more accessible to people of all socioeconomic backgrounds.’

Convergences like these point towards a new era of markets that we are slowly approaching.

Those who aren’t privy to, or choose to remain ignorant of, these new sectors will likely be left behind during this next generation of investing.

For those out of the fintech loop, check out this free report on our top three fintechs for 2020. Download now.


Imogen van der Meer,

For Money Morning

About Imogen Van Der Meer

Imogen is a research analyst at Fat Tail Investment Research, she holds an RG146 certification in securities and is currently completing a Masters Degree at the University of Melbourne. She has a particular interest in fintechs and the exciting innovations coming out of ASX-listed small caps.

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