Sunbit raises $130M, doubles down on BNPL for auto-repairs, elective healthcare

By Vaidik Trivedi

Originally published by PaymentsDive

The Los Angeles-based company provides BNPL payment options in stores and through online channels for auto-repairs and elective health services. The company aims to disrupt the $216 billion auto-repairs market and $330 billion dental, eyewear, and elective healthcare industries that are still using older financing and bill payment models, Levertov said.

The recently raised capital will help Sunbit to double down on its operations in auto-repairs and elective healthcare. The company sees this as an opportunity to capture significant market share, as other BNPL companies are more focused on retail payment options, Levertov said. The company also provides its payment option at national retail stores like Eyemart Express and Cycle Gear, a motorcycle apparel and accessories retailer. 

Sunbit earned "unicorn" status with its valuation of $1.1 billion following its latest round of funding. The investing round was led by venture capital firms including Group 11, Zeev Ventures, Migdal Insurance and More Investment House.

Average payment size on Sunbit's platform ranges from $60 to $10,000 and customers can have the financing option at a lower cost compared to other credit options, Levertov said. Sunbit partners with Transportation Alliance Bank, based in Utah, to provide BNPL financing options. 

"Our interest rates vary from merchant to merchant, but we provide BNPL options starting from zero interest for the first three months to the thirties," Levertov said. 

Despite the pandemic, Sunbit's business doubled as BNPL adoption increased due to tight finances, Levertov said. There is a high degree of customer "stickiness" in areas where Sunbit is offering its financing options, he said.

"We processed more than 250,000 transactions in 2020 compared to 125,000 in the prior year," Levertov said. "Currently, the Sunbit payment option is available at one in four auto dealerships across the country and we have 7,300 physical stores where customers can access our offerings."

Sunbit is adding more than 300 merchant locations each month, and expects to grow two-fold again this year, Levertov said. The company didn't disclose revenue and payment volume metrics. 

BNPL payment options have gained traction over the last year due to tight finances and the ease and simplicity with which customers can access these payment options, Eric Jamison, vice president of product management at Envestnet Yodlee told Payments Dive.

"Penetrating the retail space is the first step to drive user adoption," said Jamison, whose work touches on payments innovation. "Over time, we do expect these offerings to diversify to better meet the needs of the customer and drive revenue channels for these BNPL companies."

Splitit, another BNPL service provider, expanded its services to professional services to include accounting, legal aid and elective healthcare services earlier this year.