Israel and U.S.-based fintech startup Sunbit Inc. has announced the completion of a $130 million series D funding round at a $1.1 billion valuation after money. The round was led by returning investor Group 11. Other stakeholders include returning investor Zeev Ventures, and new investors Migdal Insurance, Harel Group, AltaIR Capital, and More Investment House. Sunbit has raised a total of $210 million in equity to date and hundreds of millions in debt.
Sunbit, which concentrates its operations in the U.S. but maintains a development center in Tel Aviv and Binyamina, focuses on the American credit market and develops a payment method that allows stores in the U.S. to offer their customers the option to pay in installments. Sunbit was founded by Arad Levertov (CEO), Ornit Dweck-Maizel (CTO), Tal Reisenfeld (Head of Sales), and Tamir Hazan (Head of Analytics). All of the founders other than Hazan are based in the U.S., with the company's headquarters located in Los Angeles. Sunbit employs 200 people, 40 of them in R&D centers in Tel Aviv and Binyamina.
"We will double our Israeli headcount following this funding round," Dweck-Maizel told Calcalist. "We will continue to grow throughout the U.S. in all the necessary verticals like auto repairs and dental treatments thanks to this funding. When we started five years ago it was hard to explain to Americans the issue of payments. They were used to paying in advance and receiving the product afterward and we have reversed that. Buy now, pay later, is mainly popular in online purchases, but it is also present in physical shops. We have been educating the market over the past few years."
Sunbit generates income both from clients and businesses. "After a client pays in Sunbit we send the money to the shop while the client pays us in installments. Some without any interest and some with low interest, while the shop pays us a commission on every payment, as well as a monthly subscription to use our product," Dweck-Maizel explained. "This funding will allow us to work without having to do an IPO or a SPAC. Our market is massive and there is a vast ocean of billions of dollars without a friendly solution for physical shops that will approve most transactions and won't cause the clients any discomfort."
Sunbit is scaling rapidly, posting a consistent 2x year-over-year growth in both revenue and transactions. It is the only company that enables approval rates of 90% - with an initial 30-second approval process supporting financing transactions between $60-$10,000. The company is adding more than 300 merchant locations and tens of thousands of new customers per month. Sunbit’s technology is available in 7,300 locations today, including one in four auto dealership service centers across the country, as well as national retailers such as Eyemart Express and Cycle Gear.
"Most U.S. citizens have great difficulty in dealing with immediate and necessary payments such as dental treatments and auto repairs. We have developed a technology that allows them to use installments in a very quick manner. 90% will receive an offer that suits their capabilities and is much cheaper than any other alternative," said Dweck-Maizel.
Dovi Frances, founding partner of Group 11, said, “we know financial technology, and Sunbit’s potential was clear from the beginning. As their first institutional investor, we saw them as a category-defining company, turning the traditional notion of how and where financing occurs on its head. Sunbit’s exponential customer growth creates a wealth of expansion opportunities and I fully expect Sunbit to be a decacorn within the next five years.”
Guy Fischer of Migdal Insurance, added: “Our fintech investment arm, Next Gen Finance, plans to invest $2 billion over the next 2-3 years. As a strategic investor, we are looking to partner with global fintech leaders. In our view, Sunbit’s technology and forward-thinking vision gives it a lasting foothold as a leader in the rapidly evolving buy now, pay later space. Investing in Sunbit carries less risk because of its unique business model, despite possible rising interest rates and inflation. We’re proud to partner with them to deliver better solutions.”