Split Pay Raises $125 Million for BNPL Bill Splitting

PYMNTS reported that lending startup Split Pay secured $125 million in new capital through Series A and Series B rounds. Khosla Ventures led the investment, joined by Thrive Capital and Max Levchin, CEO of Affirm.

The company enables renters and mortgage holders to split monthly housing payments into two installments, a model it also applies to car payments. Users pay a service fee. Split Pay seeks to align the consumer economy with the “invoice-based” business economy by addressing the mismatch between bills due once a month and paychecks typically received twice a month.

The firm is betting that artificial intelligence can expand underwriting while controlling losses. Andrew Borovsky, co-founder and CEO, who previously served at Block / Cash App, outlined the strategy in a statement.

“We believe that AI is going to blow up underwriting, so we spent our first two years like a lab building a new foundation model focused on people under 40,” Borovsky said.

He noted that the average earner brings in $90,000 and produces approximately $2,100 in cash flow, yet still struggles financially. Borovsky cited bill timing as a primary driver of this strain.

Karen Webster, PYMNTS CEO, stated that for higher-income households, timing is often the core issue. She pointed out that bills arrive on fixed dates, while paychecks may not. A PYMNTS Intelligence report indicated that approximately one-third of hourly employees pay late fees, overdraft charges, or penalty interest totaling roughly $50 monthly, at least once a month.