Wisetack Secures $19 Million in Funding

Wisetack, a company specializing in buy-now-pay-later (BNPL) solutions for in-person transactions, has announced the completion of $19 million in funding across a seed round and a Series A round.

Funding Details

Greylock spearheaded both investment rounds. The seed round totaled $4 million, while the Series A reached $15 million. Bain Capital Ventures also participated in the company’s fundraising efforts.

Interestingly, both funding rounds were finalized in 2019. This makes them relatively older deals compared to recent venture capital activity. However, due to pandemic-related delays and political instability last year, coverage of such transactions was postponed.

Wisetack's Unique Approach to BNPL

Wisetack’s fundraising activity and its position within the growing buy-now-pay-later market have drawn attention, particularly following Affirm’s public listing. Affirm is a well-recognized provider in this space, and its market performance has significantly impacted the industry.

Unlike Affirm, which targets online retailers, Wisetack concentrates on in-person businesses. It facilitates financing for substantial consumer expenses, such as home repairs and vehicle maintenance – purchases families may struggle to cover with cash but prefer not to charge to credit cards.

Partnerships with Vertical SaaS

Wisetack collaborates with vertical SaaS companies across various industries. For example, they partner with plumbing software providers.

This allows plumbers, utilizing these SaaS applications, to extend Wisetack’s BNPL service to their clientele.

The broad applicability of vertical SaaS is well-established. SingleOps, a software solution for the landscaping industry, serves as a recent example. The prevalence of SaaS for real-world services suggests a substantial market for Wisetack to expand into.

Growth and Revenue

Wisetack has demonstrated significant growth. The company reported a 20-fold increase in loan volume from January 2020 to January 2021.

As Wisetack generates revenue from both merchants (through loan processing fees) and consumer interest, its revenue is likely to scale in proportion to loan volume. This indicates substantial revenue growth over the past year.

The number of businesses utilizing Wisetack also experienced a 25-fold increase last year, reaching a figure in the “thousands.”

Industry Trends and Investment Signals

Wisetack aligns with several current trends. These include its integration with vertical SaaS, its API-driven business model, and the repeated investment from the same lead investor.

The practice of venture capital firms doubling down on investments has become increasingly common, as the risk associated with leading multiple rounds has diminished due to overall investor optimism regarding promising startups.

Furthermore, Wisetack represents a form of vertical BNPL, focusing on specific industry segments.

While the company has not disclosed details regarding its credit decision-making process, it is presumed that all BNPL providers specializing in particular niches employ tailored credit evaluation methods.