NEW YORK — Bread, a consumer purchase finance technology company that builds customizable payment solutions for online merchants, has completed $126 million of equity and debt financing.
Menlo Ventures led the equity round, with participation from Bessemer Venture Partners, RRE Ventures, and others. The debt facility was provided by Victory Park Capital.
Bread improves conversion and raises average order value for retailers. For instance, an online furniture store could use Bread’s technology to offer its consumers the ability to pay for a sofa in easy-to-understand monthly installments.
Unlike products offered by other online-focused purchase finance companies, Bread’s unique technology allows each merchant to white-label the offering and optimize the experience for its customers. The Bread technology is not a credit card, but its approach reimagines the $100 billion offline private-label credit card industry, where finance companies allow merchants to extend their brands to the experience of financing and payment, strengthening the bond of loyalty with their customers.
Bread’s technology does not treat financing as a one-size-fits-all experience. With Bread’s solutions, different payment plans and different experiences can be tailored to a merchant’s product set. That functionality is innovative for a digitally-focused product. Other companies in the space focus on creating their own branded payments methods that work in standardized ways across merchants. Bread, on the other hand, is not just a branded checkout button.
“We are building online-focused, next-generation solutions,” said co-founder and CEO Josh Abramowitz. “Current private-label options were built for an offline world. They don’t speak the interactive language of e-commerce and don’t work well on the web. Bread’s technology offers a different type of solution. It is optimized for the web, and designed to bring purchase finance into the online era.”
Unlike with credit cards, Bread’s solutions are designed to be easy for consumers to understand. The cost of an item becomes a straightforward series of payments (e.g., perhaps $42 dollars a month for 24 months) without tricks. For merchants, this means customers feel they have been treated right.
The company has grown its volume by five times over the past year as bigger merchants have begun to use Bread’s systems.
“What impressed us most is Bread’s intense devotion to its consumers and its merchants,” said Tyler Sosin, a Menlo partner. “When we speak with them, they simply rave about the product.”
Bread loans are made by Cross River Bank, a New Jersey state-chartered bank and Member FDIC.