Minneapolis-based financial-technology startup Sezzle announced Wednesday that it had changed its company charter to become a Public Benefit Corporation.
PBC is a legal designation that requires businesses to do right by all stakeholders. This means that a company's managers and board must lead the business in a way that contributes to a general public benefit, in addition to seeking a financial return for investors.
Sezzle says that it is the first PBC in the "Buy Now, Pay Later" space.
"Becoming a PBC cements our company's ethos – 'to financially empower the next generation' – into our governance structure," CEO Charlie Youakim said in a statement. "The PBC designation strengthens our positioning as the marquee mission-driven payments platform in North America. It shows that we are not just paying 'lip service' to the business' mission side – we are 'walking the walk.'"
Sezzle allows shoppers to divide online purchases into interest-free installments that can be spread over several weeks at no additional cost. This provides consumers with a smarter, more financially-responsible way to pay for their purchases. Sezzle is especially popular with young adults learning to manage their finances, the company says.
Despite the economic uncertainty caused by the Covid-19 pandemic, Sezzle says it has fared well in recent months. The company has eclipsed 1.3 million active customers and is approaching 15,000 active retail merchants. During this time, Sezzle has given customers the ability to reschedule payments twice at no cost, understanding many may need help during the pandemic.
"One of the things that our retail partners share time and again is their sincere appreciation for the mission-driven aspect of our business," Paul Paradis, Sezzle's chief revenue officer, said in a release. "Not only are many of our current retailers excited to be working with a PBC, but this designation will now align us with purpose-driven businesses who want to partner with other businesses that share a similar ethos."
Sezzle joins nearly 4,000 PBCs across the U.S., including brands such as Patagonia, Allbirds and Athleta. Minnesota is home to just under 100 PBCs. Some of the names on the current list include Finnegans, Can Can Wonderland, UR Turn and Binary Bridge.
"Purpose-driven companies like Sezzle need to safeguard their ideals to stay true to their core values," Youakim said. "Becoming a PBC enshrines our mission into our charter."
