Affirm Spinout Resolve Raises $60M for B2B Buy Now, Pay Later

The Rise of B2B “Buy Now, Pay Later” – Resolve Secures $60 Million

The “buy now, pay later” (BNPL) model, increasingly prevalent in consumer markets, is now expanding into the business-to-business (B2B) sector. Resolve, a San Francisco-based startup focused on providing BNPL capabilities for B2B transactions, has recently announced a $60 million funding round.

Funding Details and Company Background

Initialized Capital spearheaded this funding round, marking Resolve’s first investment since its establishment in 2019. Additional participation came from KSD Capital, Haystack VC, Commerce Ventures, Clocktower Ventures, and other investors.

According to co-founder and CEO Chris Tsai, the funding comprises both equity and asset funding, though the specific allocation remains undisclosed.

Resolve originated as a spin-off from Affirm in 2019 and has experienced substantial demand for its B2B BNPL billing solutions. The two companies actively cross-refer business, and Tsai highlights a long-standing professional relationship with Affirm founder Max Levchin, dating back to 2012, with Levchin also reportedly being an investor.

How Resolve is Transforming B2B Payments

While Affirm primarily serves consumers, Resolve concentrates exclusively on streamlining business-to-business billing. The company automates credit-based purchasing, enabling businesses to defer payments digitally under more favorable conditions than traditionally available.

Automated underwriting is central to Resolve’s approach, potentially leading to quicker invoice settlements and enhanced cash flow for businesses.

Resolve facilitates extended payment terms, often without interest or fees if accounts are settled within the agreed timeframe. Merchants, in turn, receive immediate payment (minus applicable fees) upon order placement.

Growth and Market Dynamics

Resolve offers payment terms ranging from 30 to 90 days, granting businesses greater control over their billing and cash flow. Tsai indicated significant growth following the COVID-19 pandemic, driven by the accelerated shift towards digital e-commerce.

A bike retailer, compelled to transition to online sales due to the pandemic, is cited as an example of a customer benefiting from Resolve’s services.

Tsai emphasizes that while the concept of deferred payments isn’t new, the application of a digital BNPL model – similar to Affirm – is a recent development and not yet commonplace. He notes a growing demand for these modernized payment formats, particularly in the post-pandemic landscape.

Key Features: The Smart Credit Engine

A core component of Resolve’s offering is its “Smart Credit Engine.” This system directly integrates with a merchant’s real-time data, analyzing past payment history to facilitate “immediate” credit line decisions without requiring input from buyers.

The platform also includes an embedded bill payment portal, allowing B2B customers to manage vendor invoices while simultaneously building their business credit history.

Tsai believes that the digital transformation of B2B payments is inevitable. He states that growing companies must balance the increasing demand for payment deferrals from their customers with their own capacity to meet those demands.

Platform Integration and Competitive Advantage

Resolve’s embedded nature provides a distinct advantage, seamlessly integrating into a company’s existing financial technology infrastructure. This integration is designed to boost growth, increase sales revenue, and optimize cash flow, all while mitigating risk for the business.

Investor Perspective

Alda Leu Dennis, General Partner at Initialized Capital, has prior experience with Tsai and co-founder Brian Nguyen from their previous venture, Celery. She views them as both experienced and highly motivated.

Dennis highlights the clear market need for digitizing net terms for small businesses increasingly conducting transactions online.

She believes Resolve’s unique value proposition lies in its software solution for managing the complexities of net terms billing. Businesses require tools to assess customer creditworthiness and efficiently manage payment collections.

Resolve’s approach – accelerating payments and collections through software while offering payment terms as a supplementary service – is considered a powerful combination, providing a streamlined solution for merchants to improve their receivables and credit billing management.

Future Plans

The San Francisco-based startup intends to allocate the new funding primarily to expanding its embedded billing platform.

Tsai explained that significant investment will be directed towards product development and customer support, responding to the high level of demand. He also noted the complex operational software underpinning the platform’s seamless customer experience.