The funding round was led by Beverly Hills-based venture capital firm Group 11 and included investments from Palo Alto-based Zeev Ventures, Israel-based firms Migdal Insurance and Financial Holdings, Harel Group and More Investment House, the company announced on May 20.
The funding will allow Sunbit to grow its buy now, pay later service for essentials such as automotive repair, dentist visits and eyeglasses. It also will use the funds to expand its merchant partnerships.
“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,” Migdal Chief Investment Officer Guy Fischer, who joined Sunbit’s board of directors as an observer, said in a statement.
“Investing in Sunbit carries less risk because of its unique business model, despite possible rising interest rates and inflation,” Fischer added.
Founded in 2016, Sunbit offers immediate credit approval. Around 90% of people who apply for Sunbit funding are approved, and the amount they get is based on a soft credit check that takes less than a minute. Users can be approved for financing in amounts that range from $60 to $10,000, with the option to pay off their purchases in intervals of three, six or 12 months.
The interest rate for repayment is based on where the product is purchased and the user’s state of residence, ranging from an annual percentage rate of 0% to 35.99%.
Sunbit partners with 7,300 merchants in all 50 states and has had more than 400,000 transactions since its launch. The company said it is adding around 300 new merchants a month, as well as “tens of thousands” of customers.
“Our hypergrowth illustrates that there is a demand for our unique buy now, pay later solution built for everyday needs,” Arad Levertov, chief executive and co-founder of Sunbit, said in a statement.
Sunbit partners with local businesses as well as national companies, including Honda Motor Co. Ltd., Kia Motors Corp., Cycle Gear Inc. and Eyemart Express. The service is available at one in every four auto dealership service centers across the country.
Sunbit takes a transaction fee for purchases made through its platform, as well as a monthly technology fee for some industries.
“We’re really focusing on this huge vertical, which I will say is not a sexy vertical,” Levertov told the Business Journal in March. “But if you need to fix a car or to go to the doctor, many of (those businesses) are stuck with old technology, so that’s what we do.”