Resolve, a newly established financial technology company that offers a “buy now, pay later” (BNPL) payment platform for Business to Business (B2B) transactions, announced today that they have raised $60 million in their first-ever round of funding. The funding was led by Initialized Capital, with other firms including KSD Capital, Haystack VC, Commerce Ventures, Clocktower Ventures also participating. The funding was a combination of equity and asset funding. CEO Chris Tsai has said that the funding will be used to “scale our ability to embed credit billing so these businesses can unlock sales growth and cash flow while minimizing risk and effort.”
Spin-off from Affirm
This round of funding was the first since the company spun off from Affirm in 2019. Founded by PayPal co-founder Max Levchin, Affirm is a company that offers customers the option to pay for their purchase at their own pace through a point of sale lending service. Credit and trustworthiness are determined using a series of complex algorithms that run at the time of purchase. While Affirm focused on consumer transactions, they quickly found that this type of service was also in heavy demand for business-to-business transactions. As a result, a similar product to serve this growing market segment was developed. Resolve, which has been called the “B2B version of Affirm”, has rapidly grown since then and is now an increasingly important part of the financial success story of many businesses. Both Resolve and Affirm assume all risk in the event of failure to pay, and merchants are paid in full at the time of purchase. In turn, a small fee is charged on each transaction. Despite the spin-off, the two companies still remain closely linked, with Affirm being an investor in Resolve and both companies referring business to each other.
Untapped B2B Market
While other fintech companies such as Square and Mastercard have begun to battle with Affirm for market share in the consumer BNPL market, there are not nearly as many fintech companies competing in the B2B BNPL space. One estimate pegs the B2B e-commerce space to be worth an estimated $1.1 trillion in transactions for the year 2020. With many smaller purchases not qualifying for a bank loan, having a point of sale financing option has unlocked the doors for millions of businesses around the world to access capital and grow their businesses at little to no cost to themselves. With options for a 30, 60, or 90 day repayment period, companies that use Resolve software have the opportunity to have more control over their finances in areas such as billing and cash flow. As more and more companies move online due to the pandemic, the importance of having e-commerce platforms with flexible payment options is becoming ever more important.