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Exclusive: BNPL provider Credit Key nabs $115M in debt and equity

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Oct 19, 2022
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Illustration: Shoshana Gordon/Axios

Credit Key, a buy now, pay later provider targeting the B2B sector, has secured a $100 million debt facility and a $15 million equity round, the company tells Axios exclusively.

Details: The debt facility, which can be upsized to $150 million, came from Fortress Investment Group, while the equity portion came from existing investors RedBird Capital, Bonfire Ventures, and Greycroft.

What it does: Just like a consumer BNPL firm, Credit Key integrates into the checkout flow of e-commerce businesses and makes real-time lending decisions that let businesses purchase new equipment or control inventory.

  • Credit Key will lend up to $50,000 to businesses, and those businesses can choose to spread repayments out over 12 months. But Credit Key’s typical ticket size is much lower, and the payback period is much shorter.
  • Credit Key founder and CEO John Tomich says some customers will do more than 50 transactions over a six-month period, some of which are $25 dollars while others are $250 and still others are $2500.
  • “It's more of a Venmo-for-business use case,” Tomich says.

Context: Much of the attention in BNPL has been focused on the consumer market, with firms like Klarna, Affirm, and Afterpay all working to sign up individual users and strike distribution deals with major retailers and e-commerce sites.

  • But the B2B e-commerce market is twice the size of the B2C market from a gross merchandise value perspective, according to Tomich, though around 10 to 15 years behind.
  • Lack of centralized credit data for businesses is among the reasons why bigger BNPL players have not entered the B2B market.

Of note: To asses that data, Credit Key pulls dozens of different public sources and also takes into account past purchase data from merchants.

  • “One of the challenges historically is that there hasn't been a go-to score like FICO for businesses,” Tomich says. “So that's why you haven't seen this type of real-time credit decisions for businesses.”

Editor's note: This story has been updated to clarify that the debt facility is $100 million and can be upsized to $150 million.

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