Platforms like Klarna and Affirm have popularized buy it now, pay later platforms to distribute payments over time for e-commerce purchases. Sunbit is the buy now, pay later platform that brings the flexibility and ease of these payments for everyday services like optical care, dental visits, automobile maintenance, and election healthcare. Transactions, for amounts as low as $60 to as high as $10K, can be approved for the flexible solution within 30-seconds in 7300+ locations.
LA TechWatch caught up with Cofounder and CEO Arad Levertov to learn more about how Sunbit’s platform brings consumers peace of mind with the ability to pay over time, the company’s strategic plans, latest round of funding, which brings the total funding raised to $210M, and much, much more. This round comes at a $1.1B post-money valuation.
Who were your investors and how much did you raise?
This was a $130M Series D raise, led by returning investor LA-based Group 11, and included Zeev Ventures (another returning investor), Migdal Insurance, Harel Group, AltaIR Capital, and More Investment House. The raise values the company at $1.1 billion. We’re a five-year-old company, and I’m incredibly proud of our team for getting us here so quickly.
Tell us about your product or service.
We’re the buy now, pay later (BNPL) technology for everyday goods and services – things that you need to take care of as part of regular life, like auto service, dental care, and getting glasses or contacts. You’ll find Sunbit technology in places where financing isn’t typically available or accessible to everyone, and often times where the only financing options are old-fashioned credit cards. We really shine in transactions where relationships and customer experience matters – which is why you’ll find us in more than 7,300 locations, including 1 in every 4 auto dealership service centers across the country – across thousands of communities.
In order to be a good solution when you’re face-to-face, the technology needs to be able to serve people from all walks of life – it’s really not reasonable for an auto service center, for example, to have a payment tech solution that only approves half of people who need it. Our technology helps merchants approve 90%+ of applicants – which is a win for everyone: people get what they need, and merchants can earn more.
What inspired the start of Sunbit?
Like so many catalysts for change, it started with a bad experience: I was at a Costco, a recent immigrant, so I didn’t have a credit history in the US – and I was denied credit, in front of my family. I found the whole experience humiliating and embarrassing – and that really doesn’t work for retail.
So throughout my work in the fintech industry, I kept thinking that there must be a better way. There must be a way to serve people in a respectful manner, and for the experience to be quick, painless, and easy to understand. It had to be something that enabled retailers to offer to everyone – and that thing was Sunbit.
How is it different?
You’ve probably seen BNPL solutions popping up everywhere. But unlike other solutions, that are largely focused on online luxury goods like Peloton, we’re custom-made for everyday purchases. We’re built so that retailers can approve nearly everyone. And we always make sure that the experience is stress-free.
What market you are targeting and how big is it?
Our markets are big – some of our key markets include the auto service and repair industry, which accounts for $216B and includes 117K locations including dealership service centers, chains, and independent service and repair shops. The $330B healthcare market includes dental care, eye care, and elective surgeries, with about 344K locations nationwide. And that’s just the beginning.
How has COVID-19 impacted the business?
If there was a silver lining in the COVID-19 period, it was that it proved our business was recession-proof. Being focused on everyday needs and services was definitely a competitive advantage – not to mention a helping hand for people during a very uncertain and nerve-wracking period. We’re still seeing exponential growth, so we’ve been fortunate in the way we’ve weathered the pandemic.
What was the funding process like?
This was our fourth round of funding, so we already had a lot of proof points and were showing fast, hockey-stick growth – which certainly made everything easier. We had existing investors who still believed in us and doubled up on their bets. So all in all, I’d say that the fundraising process went incredibly smoothly.
What are the biggest challenges that you faced while raising capital?
The pandemic definitely introduced a wildcard into the funding process – just because people were unsure how things would play out economically and globally. But as I mentioned before, it ended up being a solid proof point for our business – and I think ultimately, it helped us in the end.
What factors about your business led your investors to write the check?
Investors want to invest in category-defining companies that deliver real value to customers — especially if that value is even more than they expected.
What we heard from investors is that we have a “10X product” — meaning, it’s ten times better than others on the market: our technology can approve twice the number of people in a tenth of the time. This drives stickiness with our partners, gives customers a great experience, and enables us to serve a huge market that’s up for grabs. Investors saw that our business model was proven out and that we showed consistent growth — and wrote us a check to accelerate.
What we heard from investors is that we have a “10X product” — meaning, it’s ten times better than others on the market: our technology can approve twice the number of people in a tenth of the time. This drives stickiness with our partners, gives customers a great experience, and enables us to serve a huge market that’s up for grabs. Investors saw that our business model was proven out and that we showed consistent growth — and wrote us a check to accelerate.
What are the milestones you plan to achieve in the next six months?
We want to grow – grow our vertical and geographical footprints – and keep up this rampant growth that we’re experiencing. We’re going to really ramp up our focus on customer experience, and continue to evolve and bring products that make customers’ and retailers’ lives better.
What advice can you offer companies in Los Angeles that do not have a fresh injection of capital in the bank?
If you’re familiar with our culture, we run lean – and I think that’s an important thing to keep in mind – use your resources wisely. When we got our funding, we celebrated, but we didn’t throw a huge party or buy Herman Miller chairs – we’re investing it back into the business. I think this sort of frugal mindset can keep companies going until they can get that cash injection that they need.
You should also prioritize the things that drive the most value for customers. That’s what people are willing to pay for — and that’s what gets you to the next milestone. It’s also what keeps employees engaged and proud to be a part of your company because adding value is something that everyone feels good about.
What’s your favorite outdoor activity in LA?
I’m a runner – and LA is such a great place for that. I moved here from Chicago, and it’s a luxury to live in a place where you can comfortably be outside every day of the year. Running is my meditation, and the way I clear my head and get clarity about priorities. I’m grateful that I can do it in such a beautiful place.
