SAN FRANCISCO--(BUSINESS WIRE)--Affirm, the financial technology company led by PayPal co-founder Max Levchin, today announced that it raised $275 million in debt and equity financing. Spark Capital Growth led the investment and was joined by other new investors Jefferies and Andreessen Horowitz and existing investors Khosla Ventures and Lightspeed Venture Partners. The new round of financing will be used to increase significantly Affirm’s loan distribution capacity, grow its merchant services efforts, offer customers lower cost loans, and develop new products. The company will also be able to reach more consumers, and develop and launch brand new products and services.
Affirm is reimagining financial services starting with a transparent and simple, new way to get affordable financing online at the point of sale. Affirm lets shoppers pay for purchases across multiple months via transparent, simple interest loans, at fair rates.
“Today’s financial services industry is not well-equipped to handle the needs of the largest consumer generation in history,” said Levchin. “We’re building a financial technology company for the next generation, and for anyone who expects more from their financial service providers.”
A recent study found that the big four banks are each among the 10 least-loved brands in America, as viewed by Millennials – someone born between 1981 and 2000. In addition, the study found that 53% of Millennials don't think their bank offers anything different than other banks. And 71% said they would rather go to the dentist than listen to what banks are saying.
“Millennials are looking for alternatives outside the traditional banking giants, and that is precisely what Affirm is offering,” said Brian McGrath of Jefferies.
Affirm’s first product – Buy with Affirm – allows online shoppers to pay for purchases in multiple monthly installments. Affirm’s clearly stated, simple financing costs can be less than credit card interest rates. For consumers, Buy with Affirm can offer meaningful savings compared to revolving credit lines. For online merchants, integrating Affirm increases Average Order Values (AOVs) and conversion rates by more than 20% and increases purchase sizes by 79-84%, by providing consumers with access to fairly-priced, real-time credit, while promoting financial responsibility.
"We share Affirm's vision to create better, more transparent financial services products, using large-scale data to improve credit decisions," said Jeremy Philips, General Partner of Spark Capital Growth, who is joining Affirm's board. "Max has the team, vision and experience to build the leading company in this important new category."
“We price every loan to the transaction, the consumer, and the merchant,” said Levchin. “There’s no compounding interest, hidden fees, or debt calculators here – this is a simple, fixed-term loan, and the approval is in real time – so you know how much you’re borrowing, and what your payments will be each month before you make your buying decision. We think of it as the future of honest finance.”
Affirm is a financial services technology company that is reimagining consumer finance by providing consumers new and innovative ways of financing their purchases at the point of sale. All underwriting and pricing are adaptive based on data that prices marginal risk in real time, and every aspect of taking out a loan is completely transparent. To start working with Affirm go to affirm.com.