Sunbit, a Los Angeles-based lending startup, was co-founded in 2016 by Arad Levertov, Ornit Dweck-Maizel, Tal Riesenfeld, and Tamir Hazan. The company has successfully raised a significant $355 million in new debt financing, led by major financial institutions such as JPMorgan Chase, Mizuho, and Waterfall Asset Management. Sunbit caters to consumers by providing loans between $50 and $20,000 for various in-person transactions, including auto repairs, dental services, and eyewear purchases across 47 U.S. states. This latest financing follows an earlier $310 million debt round from Citigroup and Ares Management. The cash influx indicates strong investor confidence in Sunbit’s unique model of facilitating consumer payments at physical locations, a market that Levertov identifies as considerably less competitive than online alternatives.
Arad Levertov, who serves as CEO, sees the burgeoning market for brick-and-mortar consumer sales as his company’s primary target, projecting that this sector alone will reach $7 trillion by 2023. He emphasizes the ecosystem Sunbit operates in, where loyalty among customers leads to repeat business—a quality he deems “non-Amazonable.” The startup has established itself with a competitive average interest rate of around 20%, lower than the average credit card rate of 24%, with typical loan terms spanning six to seven months. Sunbit’s rapid growth is significant; with a workforce of around 550, the company disburses over 100,000 loans per month, averaging $1,000 per loan. For the current fiscal year, revenue projections indicate a rise to $260 million, showcasing effective business strategies that are moving toward profitability by the end of this year.
Levertov’s background informs much of Sunbit’s strategic direction; after serving in an elite Israeli military unit, he transitioned to roles focused on technology and finance, eventually contributing to online lending as COO of Enova. His personal experience struggling to secure credit as an immigrant catalyzed the foundation of Sunbit. The co-founders initially invested $100,000 of their own capital and faced struggles in the early years, only securing a $2.9 million round in 2016 through a small group of investors. Their breakthrough occurred in 2019 when they attracted attention from high-profile venture capitalist Oren Zeev, leading to a substantial $26 million investment that provided essential momentum for the company’s operations.
Targeting lower to middle-income Americans, Sunbit’s average customer credit score is around 700, and about 30% of its loans feature a 0% interest rate to increase accessibility. The company generates more revenue from merchant fees—averaging between 8% and 9% per transaction—compared to competitors like Affirm and Klarna, largely due to the lower competition in the markets they serve. This merchant-centric revenue model contributes 45% of Sunbit’s overall income. Additionally, Sunbit has begun to establish partnerships for co-branded credit cards with retailers like Ollie’s, expanding its service offerings while maintaining a robust framework for evaluating loan applications.
Currently, Sunbit successfully approves approximately 90% of loan applications while adhering to a capped interest rate of 36%. Innovative underwriting policies require higher down payments for riskier clients, yet they allow flexibility by not imposing late fees, origination fees, or deferred interest on 0% interest loans. Facilitating service for merchants, Sunbit equips them with an iPad loaded with their proprietary software, enabling easy loan access for customers across more than 9,000 car dealerships and 12,000 dental offices in the U.S. Their operational base spans corporate offices across California and Nevada, with additional teams located in Israel and San Francisco, demonstrating a well-structured corporate infrastructure.
The company’s approach to consumer lending, especially serving those with lower credit scores, presents inherent risks. Market fluctuations can tempt companies to relax their underwriting standards; however, investors like Zeev assure that Sunbit has maintained strict credit criteria. Despite the challenges, it has reported delinquency rates below 5% for its loans, illustrating responsible lending practices. Nevertheless, challenges in handling credit reporting have emerged, as evidenced by complaints to the Consumer Financial Protection Bureau regarding inaccuracies in consumer credit information. Levertov acknowledged these issues and reiterated the company’s commitment to mitigating errors through responsive customer service and ongoing improvements to their reporting practices, showcasing the balancing act Sunbit must navigate in the competitive lending landscape.
