CEO Charlie Youakim of Sezzle, flanked by co-founders Killian Brackey and Paul Paradis. Photo: Glen.stubbe@startribune.com Tuesday, October 30, 2018
Sezzle, the emerging Minneapolis fintech firm focused on a zero-interest, layaway-style payment tool for people without conventional credit, is raising capital.
Sezzle hopes to raise up to $30 million through an initial public offering on Australia's ASX exchange in June or July. The company chose to file on the Aussie ASX exchange because it's less restrictive for early-stage companies and because competitors have launched from Melbourne.
Sezzle brass met this spring with Australian securities regulators and local investors.
"Now is the right time to go public in Australia because investor demand is very high and it gives us access to a large amount of capital at a very critical inflection point for our company," said Sezzle Chief Revenue Officer and co-founder Paul Paradis.
Sezzle's largest competitor, Afterpay, also is based in Melbourne.
"U.S. competitor Sezzle is set to become the latest buy-now-pay-later fintech to list on the ASX, with the Minneapolis-based startup inspired by the success of its local rivals," according to an April article in the Australian Financial Review.
Sezzle with 78 employees, raised $5.6 million in a private stock offering in April, according to a U.S. Securities and Exchange filing.
The round was led by Chicago-based Continental Investors, an investment fund founded by former Morgan Stanley CEO Philip Purcell.
Sezzle previously raised more than $8 million to revamp its business model and raised $100 million in debt from Connecticut-based investor Bastion to help finance its expanding operation.
Sezzle started in 2016 as a developer of debit-card payment technology to help merchants save on costs of credit card transactions.
Sezzle switched course in 2017 as executives realized they had a better opportunity with a tool for online shoppers to make payments with no interest in four installments over two months. However, Sezzle and other competitors do charge late-payment fees.
Sezzle's revenue flows from a merchant-transaction fee that's about 3% more than that paid to credit card providers.
CEO Charlie Youakim and Paradis are the single-largest stockholders in Sezzle.
