Katapult Holdings, Inc. (KPLT): Business Model Canvas [Dec-2025 Updated]

You're trying to map out exactly how Katapult Holdings, Inc. is navigating the current credit landscape to finance durable goods for non-prime shoppers. Honestly, their business model is a tight integration of proprietary risk tech and merchant partnerships, turning access to credit into tangible sales growth. To give you the quick view: Q3 2025 revenue was $74.0 million, fueled by $64.2 million in gross originations, all while their mobile app drives 61% of that new business. This canvas shows you the nine essential pieces-from their capital partners to their specific value proposition for merchants-that make this engine run. Read on for the full, precise breakdown below.

Katapult Holdings, Inc. (KPLT) - Canvas Business Model: Key Partnerships

You're looking at the core relationships Katapult Holdings, Inc. relies on to fund and execute its lease-to-own platform. These aren't just vendors; they are capital providers and the storefronts where the transactions happen. It's a delicate balance, especially when the capital structure is actively being reshaped, so the strength of these partnerships is key.

The financing side saw a major development in late 2025. Katapult Holdings, Inc. secured a significant capital infusion from Hawthorn Horizon Credit Fund, LLC, which invested a total of $65.0 million in convertible preferred stock as of November 3, 2025. This deal was structured with two tranches: Series A for $35.0 million and Series B for $30.0 million. The proceeds were immediately put to work, repaying the existing term loan in full, which amounted to approximately $35.1 million, and partially prepaying the revolving line of credit.

The revolving credit facility providers are critical for funding lease originations. Following a June 12, 2025, refinancing agreement, the facility's liquidity was set at $110 million. By the end of the third quarter of 2025, the outstanding debt on this revolving credit facility stood at $79.6 million. Following the Hawthorn investment, the advance rate on the facility was adjusted to 90% to help save on interest expense.

The merchant ecosystem is the source of all originations. Katapult Holdings, Inc. partners with what are described as hundreds of merchants across e-commerce and omni-channel retail environments. The success of these partnerships is evident in the platform adoption metrics from Q3 2025:

• 61% of third quarter gross originations started in the Katapult app marketplace.
• KPay originations grew 66% year-over-year to $26.4 million.
• KPay represented 41% of total gross originations for Q3 2025.
• Total Applications grew approximately 80% year-over-year in Q3 2025.

Wayfair remains a significant, though perhaps less concentrated, partner. While the specific Q3 2025 percentage is not explicitly stated, in Q4 2024, Wayfair represented 27% of total gross originations, a decrease from 43% in Q4 2023. The business outside of Wayfair was reported to be growing at 50% during that period.

Technology partners are essential for seamless integration at the point-of-sale (POS) and within e-commerce platforms. The success of the app marketplace and KPay integration demonstrates the effectiveness of these underlying technology relationships. Here is a snapshot of the key financial relationships as of the end of Q3 2025:

The relationship with the technology providers is less about direct financing and more about platform reach. Katapult Holdings, Inc. has recently added major platforms to its roster, including Apple, which is a testament to the strength of its integration capabilities. The focus remains on driving transactions through owned channels, as shown by the app marketplace share.

• The June 2025 refinancing included warrants issued to Blue Owl affiliates for up to 486,264 shares of common stock.
• The Series A preferred stock from Hawthorn has an initial conversion price of $12.32 per share.
• The Series B preferred stock from Hawthorn has an initial conversion price of $11.39 per share.

Finance: draft 13-week cash view by Friday.

Katapult Holdings, Inc. (KPLT) - Canvas Business Model: Key Activities

You're looking at the core engine of Katapult Holdings, Inc. (KPLT) operations as of late 2025. These are the things the company absolutely must do well to keep the lease-to-own (LTO) machine running and growing. It's all about managing risk while scaling transactions.

Proprietary underwriting and risk management using data-driven algorithms

The core activity here is using their data models to price risk on the fly for non-prime consumers. This is how they approve transactions in seconds. The effectiveness of this is reflected in their write-off performance, which is a key metric for portfolio health.

For the third quarter of 2025, write-offs as a percentage of revenue landed at 9.9%. That figure keeps them right within their stated long-term target range of 8% to 10%. This shows the algorithms are calibrated to the current economic environment, which is defintely important for sustainable growth.

Developing and enhancing the Katapult mobile app and KPay service

Driving customers into owned channels, like the app, is a major focus because it often leads to better engagement and repeat business. They are actively developing the mobile experience and the KPay service to be the primary point of transaction initiation.

Here's a snapshot of the digital channel performance in Q3 2025:

• 61% of third quarter gross originations started in the Katapult app marketplace.
• Total app marketplace gross originations grew 44% year-over-year.
• KPay gross originations reached \$26.4 million, a 66% year-over-year increase.
• KPay represented 41% of total Q3 gross originations.
• Unique KPay customers saw a 76% year-over-year growth.

Acquiring and integrating new e-commerce and omni-channel merchant partners

Expanding the network of retailers where consumers can use the LTO solution is critical for increasing gross originations. This activity is about securing those point-of-sale integrations and ensuring the brand is visible across the e-commerce landscape.

The merchant ecosystem saw expansion, with the addition of Apple to the Katapult app marketplace. As of Q3 2025, the total number of merchants in the KPay ecosystem stood at 40.

Managing and servicing the lease-to-own (LTO) portfolio and customer collections

This activity covers the entire lifecycle after a lease is originated, from servicing payments to managing defaults and collections. The overall volume of business flowing through the platform is the primary measure of success here, alongside credit quality.

Key portfolio volume metrics for Q3 2025 include:

Also, total operating expenses in the third quarter decreased by \$4.3 million year-over-year, showing discipline in servicing costs.

Optimizing the capital structure and maintaining liquidity (cash of $9.0 million in Q3 2025)

Managing the balance sheet is a constant, high-stakes activity, especially given the debt load. The focus in late 2025 was on strengthening liquidity through strategic financing to reduce interest expense and provide a buffer.

The company ended the third quarter of 2025 with total cash and cash equivalents of \$9.0 million, which included \$5.6 million of restricted cash. On the debt side, they had \$79.6 million of outstanding debt on their revolving credit facility at the end of the quarter.

A major recent action was the \$65 million preferred investment from Hawthorn Horizon Credit Fund. This capital was used to:

• Repay approximately \$35.1 million of the term loan.
• Reduce the outstanding balance on the Revolving Line of Credit (RLOC).
• Lower the advance rate on the RLOC from 99% to 90%.

Cash generated from operations for Q3 2025 was \$800,000, a significant improvement from the \$4.1 million of cash used for operations in Q3 2024.

Katapult Holdings, Inc. (KPLT) - Canvas Business Model: Key Resources

You're looking at the core assets Katapult Holdings, Inc. relies on to run its lease-to-own business in late 2025. These aren't just things on a shelf; they are the engine, the funding, and the direct customer access points.

Proprietary Technology and Data Engine

Katapult Holdings, Inc. depends on its proprietary technology platform, which includes a data-driven credit decision engine. This system is designed to approve a lease within seconds by pricing risk for different customers.

• The platform integrates with merchant point-of-sale systems and offers alternative checkout methods like Text-to-checkout.
• The core technology supports the lease-to-own model, which historically offered yields around 100% on principal over a 12-month lease term.

Lease Portfolio Assets and Balance Sheet Strength

The assets supporting the business are primarily the lease receivables, which represent the property held for lease. While a specific breakdown isn't always public, the overall asset base provides the foundation for the financing activities.

The lease-to-own model generates revenue streams that feed back into this asset base. For the third quarter of 2025, Gross Originations hit $64.2 million.

The Katapult Mobile App Marketplace

Direct customer engagement through the mobile application is a critical resource for driving new business. This channel has become the single largest source of originations.

• 61% of third quarter gross originations started in the Katapult app marketplace.
• Total app marketplace gross originations for Q3 2025 grew 44% year-over-year.
• The KPay feature, a subset of app originations, saw gross originations grow 66% year-over-year in Q3 2025.

This high concentration means the app's performance directly impacts the company's top-line growth.

Access to Capital via Debt Facilities

Sustained growth requires reliable access to funding, which Katapult Holdings, Inc. secures through debt facilities. A recent capital transaction in November 2025 significantly bolstered liquidity.

As of September 30, 2025, the outstanding debt on the revolving credit facility stood at $79.6 million. This facility was recently refinanced in June 2025, increasing its liquidity by $20 million to a total of $110 million, with an advance rate currently at 95%.

Experienced Management Team

The leadership team's expertise in financial services and retail technology is a non-quantifiable but essential resource. This team is responsible for navigating the macroeconomic environment and executing the strategy to improve capital structure and drive growth.

• The CEO, Orlando Zayas, guides the execution against stated priorities.
• The team has focused on operational efficiencies, evidenced by fixed cash operating expenses decreasing by 21.4% year-over-year in Q3 2025.

Finance: review the impact of the November 2025 Hawthorn investment on the Q4 2025 debt covenant compliance by Monday.

Katapult Holdings, Inc. (KPLT) - Canvas Business Model: Value Propositions

You're looking at the core reasons why consumers and merchants choose Katapult Holdings, Inc. It's about providing access where traditional credit falls short, and driving growth for retail partners. The value proposition is grounded in enabling purchases for the large segment of underserved, non-prime consumers in the U.S. market.

For Consumers: Affordable access to durable goods without prime credit.

The primary draw here is enabling the purchase of durable goods-think furniture or appliances-for people who can't get standard financing. Katapult Holdings, Inc. serves a large addressable market of non-prime consumers who historically have limited options. While the cost structure means customers typically pay about double the cash price over a 12-month lease, the value is in the immediate access to the needed item.

For Consumers: Simple, fast, and transparent lease-to-own process (decisioning in 5 seconds or less).

The speed of decisioning is key to a seamless e-commerce experience. Katapult Holdings, Inc. uses a data-driven AI model that allows their platform to approve a lease within seconds. This speed helps prevent cart abandonment, which is critical in online retail. You can see the engagement: Total applications grew by approximately 80% year-over-year in Q3 2025.

For Consumers: Flexible payment solutions and early purchase options.

To make the arrangement work for different budgets, Katapult Holdings, Inc. builds in flexibility. If a customer's situation changes, they aren't locked into a single path. Here are the options available to them:

• Ending the lease by returning the goods.
• Buying out the remaining lease early at a discount.
• Lease renewal for a term of 12 to 18 months.

For Merchants: Incremental sales and market share from underserved non-prime consumers.

For the merchant-partners, Katapult Holdings, Inc. acts as a growth engine, helping them capture sales they would otherwise lose. They are obsessed with demonstrating this incremental value. For instance, in the third quarter of 2025 alone, Katapult Holdings, Inc. sent nearly $13 million of gross originations to its merchants. This focus on driving incremental sales is a core part of the partnership.

For Merchants: Seamless POS and e-commerce integration.

The integration is designed to be non-disruptive, fitting right into the existing checkout flow, whether online or at the point-of-sale (POS). The success of the two-sided marketplace model shows this integration is working well. In Q3 2025, the Katapult app marketplace was the single largest customer referral source, accounting for 61% of gross originations. Furthermore, the KPay (Katapult Pay) service, which is part of this ecosystem, saw its gross originations grow 66% year-over-year in Q3 2025, making up 41% of total gross originations. This shows a strong shift toward their owned digital channels.

The overall performance in Q3 2025 validates the strength of these value propositions in driving top-line growth, even as the company focused on capital structure improvements. Here's a quick look at the Q3 2025 results that reflect the success of delivering on these promises:

The company also reported a 76% increase in applications through the first three quarters of 2025 compared to 2024, which is a strong indicator of consumer demand for these value propositions. The Net Promoter Score (NPS) remained high at 64 in Q3 2025, suggesting defintely high customer satisfaction with the service provided.

Katapult Holdings, Inc. (KPLT) - Canvas Business Model: Customer Relationships

You're looking at how Katapult Holdings, Inc. keeps its non-prime consumer base engaged and coming back for more. The relationship strategy centers heavily on digital channels, which makes sense for an e-commerce focused FinTech. Honestly, the numbers show they're succeeding in driving users to their owned platform.

The core of the relationship strategy is definitely the Katapult mobile app. This isn't just a portal; it's becoming the main destination. For the third quarter of 2025, a commanding 61% of all gross originations started directly within the Katapult app marketplace. That makes the app the single largest customer referral source, which is a huge win for controlling the customer journey. To give you a sense of the momentum, since the start of 2025, the app has been opened more than 11 million times. This high level of interaction is key to driving loyalty.

We see this loyalty reflected in the repeat business metrics. For Q3 2025, approximately 55% of all gross originations came from customers who had used Katapult before. That's a solid base, though it was slightly lower than the 58.4% seen in Q2 2025. Also, the focus on getting customers to use the service multiple times is working; in Q2 2025, the cohort of customers with more than 1 current lease grew by over 16%, making up about 29% of the total lease portfolio then.

Customer sentiment is a strong indicator of relationship health. As of September 30, 2025, Katapult Holdings, Inc. reported a Net Promoter Score (NPS) of 64. That's a very healthy score, especially considering the customer segment they serve. For context, the score was 63 at the end of Q2 2025 and slightly higher at 66 at the end of Q1 2025.

Here's a quick look at how these key relationship metrics stacked up in the third quarter of 2025:

Regarding automated self-service tools and direct communication via email/SMS, the specific metrics for those channels aren't detailed in the public reports. However, the growth in KPay originations, which hit 41% of total gross originations in Q3 2025, suggests that the in-app payment experience is highly effective and likely incorporates significant self-service functionality for account management. The focus on driving repeat business through the app marketplace is the primary documented driver for customer retention.

You should track the app marketplace origination percentage closely. If it continues to climb above the 61% mark from Q3 2025, it means Katapult Holdings, Inc. is successfully migrating more customer interactions onto its owned, lower-cost digital platform. Finance: draft 13-week cash view by Friday.

Katapult Holdings, Inc. (KPLT) - Canvas Business Model: Channels

You're looking at how Katapult Holdings, Inc. gets its service in front of the non-prime consumer and into the hands of the merchant partners as of late 2025. The focus has clearly shifted toward owned and controlled digital channels.

Direct e-commerce integration at merchant point-of-sale (POS) and Direct merchant partnerships and waterfall programs remain foundational, as Katapult Holdings, Inc. is associated with hundreds of retailers across the United States. These direct integrations are the entry point for many transactions, feeding into the overall application volume. Total Katapult applications, which includes those coming in from direct, waterfall, the app marketplace, and KPay, increased 76% during the first nine months of 2025 and grew 80% in the third quarter alone.

The Katapult mobile app marketplace has become the dominant starting point for customer journeys. In the third quarter of 2025, 61% of third quarter gross originations started in the Katapult app marketplace, making it the single largest customer referral source. This channel shows strong velocity, with the number of gross originations in the app marketplace growing approximately 62% year-over-year during Q3 2025. For context, in Q2 2025, approximately 60% of gross originations started in the app marketplace, with total app marketplace gross originations growing 56% year-over-year.

The KPay service for in-app and merchant-site transactions is accelerating rapidly as a key component of the overall marketplace strategy. During Q3 2025, KPay transactions grew by 66% and represented 41% of total gross originations. This is an acceleration from Q2 2025, where KPay originations grew 81% year-over-year and accounted for 39% of total originations. The growth in KPay is directly tied to consumer engagement within the app ecosystem.

Here's a quick look at how the primary digital channels stacked up in the most recently reported quarter:

The strategy appears to be funneling activity through owned digital properties, which gives Katapult Holdings, Inc. more control over the customer experience. The company is clearly driving customers to start their journey within its own environment.

• Total Katapult Applications growth (YTD 9M 2025): 76%
• Total Katapult Applications growth (Q3 2025): 80%
• Unique New Customers Growth (YTD 9M 2025 vs. 2024): 35%
• Unique New Customers Growth (Q3 2025 vs. 2024): Nearly 47%

The growth in unique new customers, up nearly 47% in the third quarter alone, fuels the top of this channel funnel. If onboarding takes 14+ days, churn risk rises.

Katapult Holdings, Inc. (KPLT) - Canvas Business Model: Customer Segments

Katapult Holdings, Inc. focuses its lease-to-own solution on underserved U.S. non-prime consumers who typically can't get traditional financing. To put the size of this market in perspective, data from late 2025 indicated that approximately 37% of US Adults could not cover a $400 emergency expense without some form of assistance. This points to a substantial base needing affordable access to essential purchases.

The existing customer base shows strong loyalty, which is a key component of the model. For the third quarter of 2025, approximately 55.3% of gross originations came directly from repeat customers. Furthermore, the Lifetime Value (LTV) for this cohort of returning customers actually increased by about 5% during that same third quarter. This repeat business is defintely a core strength.

The customer base is growing both in retention and acquisition. You are actively bringing in new users while keeping the existing ones engaged. Here's a quick look at the growth metrics as of the end of the first nine months of 2025:

• Unique new customers grew by 35% compared with 2024 for the first three quarters of 2025.
• The third quarter of 2025 alone saw unique new customer growth of nearly 47% year-over-year.
• The platform serves consumers purchasing durable goods like electronics, furniture, and auto accessories.
• Gross originations from direct/waterfall channels (excluding home furnishings and mattress categories) grew approximately 42% year-over-year in Q3 2025.

To keep things clear, here are the key statistical snapshots regarding the customer segments as of Q3 2025:

Finance: draft 13-week cash view by Friday.

Katapult Holdings, Inc. (KPLT) - Canvas Business Model: Cost Structure

You're looking at the core expenses Katapult Holdings, Inc. incurred to run its lease-to-own platform through the third quarter of 2025. Keeping these costs disciplined is central to their strategy for reaching profitability.

The largest variable cost tied directly to the portfolio quality is the write-off expense. Lease merchandise charge-offs (write-offs) were reported at 9.9% of revenue in Q3 2025. This metric was within the Company's long-term target range of 8% to 10%.

On the debt side, funding costs and interest expense are a major component, especially given the capital structure changes. As of the end of the third quarter, Katapult Holdings, Inc. had $79.6 million of outstanding debt on its revolving credit facility. The company noted that reducing the advance rate on the RLOC (revolving credit facility) is expected to result in interest expense savings over time.

The focus on operational efficiency is clear in the fixed costs. Fixed cash operating expenses, which exclude variable costs like servicing and underwriting fees, were reduced to $7.5 million in Q3 2025. This figure represented a 21.4% decrease year-over-year.

Technology development and platform maintenance costs are embedded within the operating expenses, though specific figures are often separated out in GAAP reporting. Fixed cash operating expenses specifically exclude depreciation and amortization on property and equipment and capitalized software, which covers a significant portion of technology investment. Overall, total operating expenses in Q3 2025 decreased by $4.3 million compared to the prior year period.

Personnel costs saw direct reductions contributing to the overall expense streamlining. Compensation costs decreased by $2.1 million in Q3 2025, which helped lower the net loss for the quarter. This reduction, along with lower litigation settlement expenses of $3.2 million, drove the improvement in the net loss.

Here's a quick look at the key expense and credit quality metrics for Q3 2025:

The cost structure management also involves these specific components:

• Funding costs tied to the $79.6 million outstanding debt on the revolving credit facility.
• Variable costs such as underwriting fees and servicing costs, which are excluded from the fixed cash operating expenses definition.
• Non-cash expenses like depreciation and stock-based compensation expense, also excluded from the fixed cash measure.
• Costs related to debt refinancing and litigation settlement expenses, which are treated as non-recurring or variable for this specific metric.

Finance: draft 13-week cash view by Friday.

Katapult Holdings, Inc. (KPLT) - Canvas Business Model: Revenue Streams

You're looking at how Katapult Holdings, Inc. (KPLT) actually brings in the money, which is key for understanding its valuation. The revenue streams are pretty direct, stemming from the lease-to-own arrangements they facilitate for non-prime consumers at the point of sale.

The primary source is the lease payments collected from consumers over the term of the agreement. This is the scheduled stream of payments that make up the total lease value. Beyond that, Katapult Holdings, Inc. also captures revenue from early purchase options and other lease-related fees. These fees can come from things like late payments or the option for a customer to buy the item outright before the lease term ends, which accelerates revenue recognition.

This revenue engine is directly tied to the volume of business they write, which they call gross originations. For the third quarter of 2025, the total revenue hit $74.0 million, marking a solid 22.8% increase year-over-year. That growth is fueled by the underlying transaction volume.

Here's a quick look at the key financial metrics from that period:

To be fair, while Q3 was strong, the full-year 2025 revenue is projected to grow between 18% and 20%, showing management is factoring in some near-term macro caution. Still, the business is scaling.

The revenue is driven by gross originations, which were $64.2 million in Q3 2025. This metric shows the total dollar value of the lease agreements initiated during the period. The growth in originations directly translates to future lease payment revenue. You can see the underlying activity is robust, with applications growing by approximately 80% year-over-year in Q3 2025. Here are some other numbers showing where the activity is coming from:

• Katapult app marketplace accounted for 61% of Q3 2025 gross originations.
• Repeat customers generated approximately 55% of gross originations in the quarter.
• The KPay service saw a 76% year-over-year growth in unique customer count.
• Write-offs as a percentage of revenue were 9.9% in Q3 2025, within the long-term target range of 8% to 10%.

Finance: draft 13-week cash view by Friday.