US-Israeli fintech Sunbit raises $130m, hits unicorn status
Sunbit, the BNPL service provider, has raised $130m in capital following a successful Series D investment round.
The funding drive was led by the America-Israeli fintech VC Group 11, along with Zeev Ventures, Migdal Insurance, Harel Group, AltalR Capital and More Investment House and raised Sunbit’s valuation to $1.1bn.
Sunbit is now the latest company to claim unicorn status as a private company with a valuation of over $1bn.
Sunbit expansion strategy
The fintech startup, which operates R&D centres in Tel Aviv and Binamina, specialises in the US credit market and has innovated a payment solution that enables US stores to provide their customers with the option of buy now pay later (BNPL) services.
Sunbit will use the funds to expand its current merchant footprint to reach more retailers and service providers, online and offline with the new investment.
In a statement released by the company, it revealed plans to develop more products that serve its customers and merchants, helping them to facilitate transactions and enhance their budgets and their bottom lines.
- According to reports, Sunbit is the only fintech BNPL technology that enables a 90% approval rate.
- Each month, the company expands its customer base by more than 300 merchants and tens of thousands of new users.
- The first 30-second approval process provides $60- $10,000 funding transactions
- Sunbit services are available in 7,300 locations. These include one-quarter of car dealer service centres across the US
- Sunbit also provides services to US-wide retailers such as Eyemart Express and Cycle Gear.
Speaking about the latest funding round, Levertov said the new investment was evidence of Sunbit’s market potential. “The continued support from existing investors as well as new commitments from esteemed investors such as Migdal Insurance and Harel Group underscores the impact we are making in the sizable markets we serve.”
He continued, “Our hyper-growth illustrates that there is a demand for our unique buy now, pay later solution built for everyday needs. The new capital will enable us to further disrupt the $216bn auto service and repair industry and the combined $330bn dental, eyewear, and elective healthcare industries — markets that are stuck in the era of ’80s-style financing.”
Guy Fischer, CIO and deputy CEO of Migdal Insurance, who is also a new board member for Sunbit, explained, “Our fintech investment arm, Next Gen Finance, plans to invest $2bn over the next two to three years. As a strategic investor, we are looking to partner with global fintech leaders.”
He said, “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.”
Dovi Frances, founding partner of Group 11 added, “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.”
FIVE things fintechs must do to keep investors onboard
New investors flocked to the stock market during the COVID-19 pandemic. Thirty-eight percent of investors said they had never had a brokerage or similar account before opening one in 2020.
Low or no-fee trading options have helped accelerate the trend – nearly half of new investors said they accessed their account primarily through a mobile app. As FinTechs, how do we create the trust needed to keep new investors in the market and create a fruitful customer experience for them?
The financial industry does a disservice to individual investors if we merely offer tools that focus on making money quickly, an approach that usually backfires. Instead, the surge of interest presents an enormous opportunity for those who want to help more consumers use financial technology to educate them on responsible spending, saving, and investing in order to achieve financial wellness current fintech tools have welcomed individual investors in the door.
Now, it’s time to focus on education and improving their experience going forward. There are several ways those of us in fintech can step up to shape the future of retail investing so that it works better for everyone, starting with the following areas.
Equal access to financial wellness education
Financial health should be available to everyone — but today, not everyone has the educational resources to achieve it. One study shows that only 3.9% of students from low-income schools were required to take a personal finance class. What they aren’t learning in school or from family members, fintech companies can provide on their platforms.
The companies should move from solely offering financial services to a more responsible model of education, advice, and prescriptive choices to help consumers develop better habits and make wiser financial decisions. Not only can they empower consumers and bridge historical wealth divides, but they can also stimulate growth by opening up new consumer segments.
Just as we’ve come to expect that our fitness routines are tailored to our individual bodies, we’re also ready for finance tools that go beyond one-size-fits-all solutions. But only six percent of financial institutions say they’re using the kind of technology that allows them to deliver a deeply personalized experience. Fintech tools need to reflect that financial success looks different for each of us.
For one consumer, it may mean providing guidance on how to pay off student loans early; for another, it may mean prescriptive actions that enable them to stick to a budget for the first time; for a third, it could look like prioritizing environmental, social and governance (ESG) investments, so that her portfolio aligns with her political beliefs.
Now, we are seeing financial technology beginning to meet the demands of personalized finance in a substantial and meaningful way.
The rise of AI-Powered Advice
Big-picture advice and predictive guidance used to be a feature of high-end financial advisory firms — a perk only available to those who could afford it. But thanks to rapid advancements in data analytics and artificial intelligence (AI), that kind of holistic advice is now more accessible than ever. AI-driven robo-advisors can parse many different streams of financial information, delivering customized answers to key questions: Is it time to buy a home, or is it smarter to keep renting? Can I afford to take out another student loan?
Intelligent connectivity powered by AI can anticipate consumers’ needs and next steps, making proactive suggestions that guide them along the path to financial wellbeing. Fintech companies can also help consumers identify when their financial picture becomes too complex for a robo-advisor, and help them find a human financial advisor to meet their needs.
Focus on financial mental health
New investors are quickly finding that the market can be overwhelming. That’s not surprising, financial anxiety is common and studies show that financial stress can have an impact on mental health for some.
It’s not enough for fintech companies to give retail investors access; they also must provide the guidance and support that help consumers manage their financial well-being. Educational tools can ensure that consumers are well informed about their options.
Predictive analytics can anticipate consumers’ questions, serving them key information and insights before they ask. Features that emphasize a comprehensive notion of financial well-being, rather than short-term wins and losses, can also help ensure that consumers are keeping their eyes on the bigger picture.
Gamification for good
The surge of gamification apps has done an impressive job making investing as engaging as playing a video game or joining a social media platform.
Much of the current use of gamification emphasizes short-term thinking, but there’s also an opportunity to help consumers think more broadly about their overall financial picture. One example is peer benchmarking, a feature that enables help consumers to see how their financial habits compare to those of friends and fellow consumers.
Gamification can also be used to incentivize making smaller, smarter choices — for example, rewarding saving over making an impulse buy.
The future of fintech is about more than just broadening access to the markets. It’s about making sure more individuals have access to the tools that can help improve their financial well-being—in the ways that suit their own circumstances and needs. The potential to act within their own set of individual priorities, with their long-term financial wellness in mind is much more empowering to a consumer than simply relying on short-term, high-risk investments.