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Sezzle Raises Seed Funding Ahead of Shopify Debut

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It’s a good time to be Sezzle.

The alternative payments company that made its Finovate Debut earlier this year at FinovateSpring has just completed a seed round of funding, raising $1.85 million. The funding surpassed expectations, according to Sezzle founder and CEO Charlie Youakim, who stated that the company has seen continued interest from investors, oversubscribing their round. “Our ultimate goal is to be successful, even if the founding team ends up owning a little less,” he said. Participating in the seed round were Belgium’s E-Merge and China’s CSC Upshot, as well as “angels, superangels, friends and family.”

The funding for Sezzle accompanies news that the company will launch on Shopify with its first set of merchants. Sezzle is in final testing with clients now and expects to be able to announce the names of its merchant partners in mid-December. Merchants are expected to roll out the integration over the next couple of weeks, Youakim said.

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CEO and founder Charlie Youakim demonstrated Sezzle at FinovateSpring 2016.

Founded in January 2016 and headquartered in Minneapolis, Minnesota, Sezzle introduced its payment solution at FinovateSpring 2016. Sezzle is a payment platform that leverages bank sign-on technology and ACH rails to give merchants a cheaper option—fees of 1.5% and 15 cents for transactions—that is half the cost of credit cards and PayPal. At the same time, consumers using Sezzle benefit from rewards—currently 1% cash back—on purchases that are essentially debit-card transactions. “Typically, people convert to credit cards because of rewards,” Youakim explains, “but there are issues and anxieties for young people [when it comes to credit cards and debt].” For these consumers, debit payments are much more familiar. Youakim also points out that Sezzle is a cardless option, which also appeals to younger consumers.

Going forward, Youakim hopes to add merchant-backed rewards as well as potentially increasing the cash-back amount as adoption of Sezzle increases. “We are getting more attention from users and merchants,” he said, pointing out that some merchants who are planning to deploy the technology are waiting until after the Christmas season. “We are definitely getting some interest out there from merchants,” Youakim added, “a few ‘not yets,’ but not very many [saying] ‘No.'”