$125 million for a new BNPL

Lending startup Split Pay raised $125 million across its Series A and B, Axios reported on September 8. Khosla Ventures led, with Thrive Capital and Affirm CEO Max Levchin joining.

Bills monthly, paychecks biweekly

The pitch is to make the consumer economy work more like the invoice-based business economy. Big bills land once a month, but most paychecks arrive twice a month, and that mismatch is the gap.

Two years building a model

CEO Andrew Borovsky, formerly of Block and Cash App, says the team spent its first two years as a lab, training a foundation model on people under 40 to widen underwriting without blowing up losses.

“We believe that AI is going to blow up underwriting.”

$90,000 and still stretched

Split Pay found its average customer earned about $90,000 and generated around $2,100 in cash flow, yet lived paycheck to paycheck. The biggest reason was when bills hit, not how much came in.

“The biggest reason was the timing of bills.”

Rent in two payments

Renters and mortgage holders can split a monthly housing payment into two installments for a fee. The same option extends to other big-ticket obligations like car payments.

Who actually gets squeezed

PYMNTS puts paycheck-to-paycheck consumers in three buckets: 41% blame everyday spending, 31% a short-term shock, 28% long-term commitments. Nearly a third of hourly workers pay about $50 in fees monthly.

“Bills land on fixed dates and paychecks may not.”