28/07/2021

Target to use Minneapolis startup’s buy now, pay later platform

Coming off a year in which its sales grew $15 billion, Target Corp. is partnering with Minneapolis-based financial technology company Sezzle Inc. to provide customers with new options to pay for goods sold in its stores and on its website.

On Friday, Sezzle announced it had entered into a three-year agreement with Target after completing a proof-of-concept run for its buy now, pay later platform with the retailer.

Sezzle allows shoppers to split payment for their orders into four interest-free installments over a period of six weeks. Customers aren’t charged a fee if they pay on time.

Target has a history with Sezzle, having mentored its founders in 2019 through its Techstars retail accelerator, a program designed to help promising companies. Startups selected for the accelerator received up to a $120,000 initial investment as well as mentorship from Target leaders.

Sezzle went public on the Australian stock exchange in 2019, allowing the company to draw $30 million in investment backing for its digital version of installment plan payments. In April, Sezzle told investors and regulators in Australia that it intends to register with the U.S. Securities and Exchange Commission for an IPO.

Sezzle experienced a surge of new customers during the pandemic, ending 2020 with more than 2.2 million active users, up from 914,886 for the prior year. The company reported income of $49 million for 2020, compared with $13.3 million for 2019.

Sezzle says its platform is used by more than 34,000 retailers.

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