I've been out of Sezzle since November (exit at $2:31), but still track it alongside Afterpay and other BNPL companies especially around the US and now UK. I sold out for a number of reasons:
I no longer believed the company would grow at a rate which exceeded Afterpay's in terms of share price appreciation,
More particularly I was disappointed with the governance/disclosure by the company/CEO (i.e. no announcement of the Bass Pro trial),
Quadpay overtook them in Google search trends and while growing they were very clearly running last in the BNPL race in the US,
The methods the company employed to around marketing/advertising which indicated inorganic growth (competitions on IG to gain followers - who then unfollow, the "I'd like to buy now, pay later using @sezzleinc at ..." approach which isn't coming from real customers).
Their complete lack of ability to sign one merchant of any note since listing at the end of July 2018. I know some are still holding out for this to occur, but it's looking less and less likely in the face of the growth in Sezzle's competitors.
Up until this week I still had the idea to buy a parcel before the upcoming quarterly update as my guess was it would lead to a 1 day jump which could be worth the trade, but the issue with the California license and the extremely poor disclosure by the company (2 days to announce & then saying "we believe we are right" and nothing more) means I'll leave my money in Afterpay of which I'm also expecting a big jump around the HY results in February.
Anyway, your investment decisions are yours to make, just thought I'd outline mine for anyone who's read through every post on this thread.
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Sezzle is trailing the other BNPL platforms in terms of search interest. Afterpay blew the other three out of the water over the period of Black Friday to the end of the Christmas spending period. Where Sezzle and Quadpay were once close, Quadpay has pulled clear ahead, and Sezzle is in last position. In 2019 we saw Klarna, Quadpay and Sezzle release their apps. As we're in a mobile world app ratings and reviews are a useful indicator for what their customers think of them, and the raw numbers can provide an indication of growth. Sezzle lags the other 3 platforms in terms of app ratings for both iOS and Android. After launch, they had a campaign to have their customers leave ratings/reviews which grew their numbers, but since then organic growth has been very slow (10 ratings left between 30/11 and 4/1). Like with the Google Trends data Afterpay is in a league of its own.
Of course their customer numbers are very different so you would expect the same rate, but perhaps their customers are just less engaged with Sezzle? Sezzle's customers are also customers of the other platforms (& why wouldn't they be considering the merchants they have signed up) and while they use Sezzle, don't rate it as much as the others? The below table is from Second Measure a US analytics company, it shows you that Sezzle customers also use the other platforms (more so than Afterpay customers use Sezzle).
Sezzle's rank in the shopping category has improved as previous posts have shown, however when compared to its competitors it's improvement is meaningless. Where Klarna, Quadpay and Afterpay are in the top 100 and have been for 5 months, Sezzle is yet to exceed 150. Hard to see it make inroads over the next 6 months when it's customers are already using the other platforms, and the other platforms are more likely to win the bigger merchants.
Regarding Canada, as we no the management have provided no information as to how that is going, except that they have opened an office in Canada, which was announced in a press release (increase in operating costs).
Using the Storeleads site (https://storeleads.app/reports/shopify/app/external-sezzle) we can see according to this there are more stores from Australia using Sezzle, than there are from Canada. I have a feeling this will change soon, but the number is still quite low.
(One thing you can take from that site is the majority of Sezzle's merchants use the Shopify platform.)
As you dig deeper, you really see Sezzle hasn't done much to expand into Canada at all - in the last 3 months only 2.3% of its web traffic came from Canada. When one of the other (better experienced/resourced) platforms launches there, you can imagine Sezzle's opportunity to gain a foothold will dry up.
On a positive note, merchant numbers are increasing. More and more Shopify stores are adding Sezzle as an option (though Afterpay has 22,000+ Shopify stores https://storeleads.app/reports/technology/Afterpay), and Sezzle's store directory is growing weekly. As seen with other BNPL platforms the continued ability to add merchants leads to increasing numbers of paying customers, so I'd expect to see a good bump in the Q2/HY announcement (my guess is ~830,000).
Note Klarna isn't a pure pay in 4 installment BNPL platform so some of its merchants do not offer it, and Klarna/Quadpay offer a pay in 4 anywhere virtual card product. Quadpay is leaning on this product and hasn't been adding any merchants to its checkout product, whereas Klarna is still adding merchants. Note raw number doesn't indicate merchant size. It's more than likely one or two of Afterpay's merchants (Ulta and Forever 21 = 41 million web hits a month) receive the entire amount of web traffic that all of Sezzle's merchants get each month.
I don't think there is a "Target trial" (again no disclosure from the company), I would have expected to see something written about it, or a customer talking about it on social media (like what happened with the Bass Pro product trial) in the time since. I get the feeling it was just a pitch / presentation they did as Sezzle as part of Target's Retail Accelerator program. Plus when you look at Target's traffic, its clear Sezzle couldn't handle that volume, even if it was restricted to just one state.
Another positive for Sezzle is in its ratings/complaints. While it doesn't receive many app reviews, they don't tend to be critical - as opposed to Klarna and Quadpay. Also complaints left with the "Better Business Bureau" (https://www.bbb.org/us/mn/minneapolis/profile/online-retailer/sezzle-0704-1000027079) are lower than the other platforms.
However you need more than just customer satisfaction - Afterpay also has excellent scores, especially when you factor in the difference in customer numbers.
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If your a holder, I'd suggest you continue to do your own research. At least the BNPL market in the US is expanding, and Sezzle will likely to continue to grow with it by picking up small Shopify merchants and their customers, but the growth rate will be a level much lower than the competitors and both the merchants and customers will increasingly use the other BNPL platforms as well (as there is already evidence for).
Note: I'll still track Sezzle's metrics, but will likely share them in the Afterpay thread Alternative Metrics and on Twitter.
SZL Price at posting:
$1.40 Sentiment: None Disclosure: Not Held
