Splitit signs deal with Goldman Sachs on US$150Mmn revolving credit facility

By Pavithra R

Splitit Payments, a global payment solutions provider that enables shoppers to pay instalments via their credit cards, has announced securing a US$150 mn Receivable Warehouse Facility to support the U.S. and European growth.

According to media reports, the new investment is part of the company’s 2021 capital management strategy. The firm has signed the three-year revolving facility with Goldman Sachs Bank USA, doubling the size of the company’s existing credit facilities.

Splitit is planning to use the facility to increase the company’s gross margins, fund merchants in major markets and provide a structure to facilitate additional jurisdictions. According to the terms of the facility, 13 mn warrants will be issued to Goldman Sachs in 3 equal tranches, exercisable at a price of $1.30 per share. Each tranch is to expire 5 years after their respective issue date, with the first to be issued upon Splitit’s first use of the facility.

“This large committed facility from Goldman Sachs is a key pillar of our Merchant Sales Volume growth strategy. Demand from merchants in the U.S. and Europe for our funded model has never been stronger, and coupled with our existing strong balance sheet, we now have the foundations in place to accelerate our growth plans whilst also driving improved margin,” said Brad Paterson, CEO of Splitit.

Founded in 2012, Splitit’s patented technology enables e-commerce merchants to offer interest-free monthly instalment payments to their customers at the point of sale. Its vision is to be a leading provider of interest-free, card-based instalment payment solutions for merchants and shoppers worldwide.

The financing following the company’s successful fourth quarter of 2020, during which the company saw its merchant sales volumes grow 218% year-over-year to US$86.3 mn, equivalent to the sales volumes processed in the whole of 2019. Gross revenue soared to US$2.9 mn, representing a 359% increase compared to the same period in 2019 and a 22% increase compared to the prior quarter. The company. in future is looking forward to increasing its payment volume (MSV) and expanding instalments on cards to more places.