Bread, a direct lending platform announced it raising $14.3 in Series A round of funding led by Bessemer Ventures Partners, an early investor in trail blazing P2P platform Zopa.
Founded in 2011, the startup Bread is known for its pay-over-time buttons that are seen on retail websites. The company pay the merchants in full and depends on the consumer to pay back monthly installments with interest in the period of 24 months. This is the only platform that monetizes across social media, desktop and mobile. Through this, Bread tries to disrupt the traditional consumer lending space or the credit card companies by trying to introduce an alternative options to private-label credit cards.
Bread has a unique approach with retailers and technology that it uses to integrate the loan options onto their site, said Rob Stavis, partner at Bessemer and Charles Birnbaum VP of the company. Unlike to other lending options, it keep the customers on the retailer’s page so the consumer can finish the whole financing process without being directed to a third-party site. Also, its interest rates are much lesser than credit card companies and it serves its customers with fair rates, transparent terms and no hidden charges.
Stavis said, ” Too many startups have built businesses around a simple “arbitrage” of originating loans and reselling them to others at a higher price. He said he always feared that their costs of acquiring customers could go up as competition heated, which is indeed what is happening across the online-lending market.”
With the fresh funds, Bread plans to grow wider, fund initial loans and compete with credit card companies and a new generation of internet payment options that are quickly swamping the digital credit space.