Buying things with Bread? That tops bitcoin. Well actually, Bread is a fintech startup that just got $126M to add more retailers to its financing scheme. Seems that selling higher priced retail items like washer/dryers, refrigerators, etc. calls for different ways to finance the purchase of those items. So, Bread ‘white labels’ financing options for merchants, provides the lending capital, and the merchant can then offer the customer a better deal (aka, enable them to buy more) by offering loan financing than having the customer pay for the item with higher interest credit cards. Hmmm! Who knew that bread could buy a new flat screen?
When you buy something online, chances are you use your credit card. If it’s a bigger purchase, like a mattress or a washing machine, you might decide to pay it off over time. Bread is among the financial technology start-ups attempting to get you to ditch your plastic and instead opt to finance your purchase with a loan that has lower rates and predictable monthly payments.
Bread said on Wednesday it has raised $126 million through a Series B funding round to expand the number of retailers that offer its financing. Menlo Ventures led the equity portion of the investment, with participation from Bessemer Venture Partners, RRE Ventures and others. A debt facility was also provided by Victory Park Capital.
The New York-based company was founded in 2014 and offers white-label solutions for retailers who wish to offer convenient financing to their customers. The reason is simple: Customers are more likely to spend more money, on more things, when they have the ability to pay later.
“When we go to merchants, they’re aware that financing will have a real impact on their sales,” says Josh Abramowitz, co-founder and CEO of Bread.
Affirm, PayPal Credit and Klarna are also racing to finance big-ticket online purchases. Unlike its competitors, however, Bread isn’t trying to build a consumer brand. It’s differentiating itself by allowing retailers to offer customized financing options with their own branding. In doing so, Bread sees an opportunity to replace private-label credit cards that you might get from Tiffany’s or Macy’s that have long been used as a means of building customer loyalty…”
Full Story at Forbes