NEW YORK—Fintech startup Bread has raised $126 million through a Series B funding round to expand the number of retailers that offer its financing.
Founded in 2014, Bread offers white-label solutions for retailers that want to offer convenient financing to their customers.
"When we go to merchants, they're aware that financing will have a real impact on their sales," Josh Abramowitz, co-founder and CEO of Bread, told Forbes.
“Affirm, PayPal Credit and Klarna are also racing to finance big-ticket online purchases. Unlike its competitors, however, Bread isn't trying to build a consumer brand,” Forbes reported. “It's differentiating itself by allowing retailers to offer customized financing options with their own branding. In doing so, Bread sees an opportunity to replace private-label credit cards that you might get from Tiffany's or Macy's that have long been used as a means of building customer loyalty.”
"Private-label solutions were built for an earlier era. It's quite striking that 20 years into the Internet revolution so much of the core of banking has not yet changed," Abramowitz told Forbes.
Retailers working with Bread can choose the terms they want to offer customers, with interest rates ranging from 0% to 29.99%, and repayment periods between three and 48 months. The idea is to offer most customers terms that are more attractive than on their credit card, Forbes stated.