In an eventful year for fintechs, former PayPal co-founder Max Levchin’s buy now, pay later credit card alternative, Affirm, closed yet another massive funding round. The funding round is just the latest of several exciting announcements in the fintech’s 2020 calendar.
The Series G Funding Round raised $500 million and was led by returning investors GIC and Durable Capital Partners. Investment companies Lightspeed Venture Partners, Wellington Management Company, Baillie Gifford, Spark Capital, Founders Fund, and Fidelity Management & Research Company also joined in the round. Affirm has raised over $1.3 billion since it was founded in 2012. Last year the company was valued at nearly $3 billion. Its current valuation has not been shared.
As a more flexible alternative to shopping without credit cards, Affirm partners with 6,000 merchants including Walmart, Peloton, Audi, and Expedia to help them drive sales, grow average order value, and improve on repurchase rates through a point of sale buy now, pay later option. The loans provided by Affirm are secured through lending partners and customers enjoy a level of transparency with Affirm where there are no hidden or late fees.
This year, e-commerce giant Shopify selected Affirm as its exclusive partner for Shop Pay Installments in a move that will put Affirm in front of the platform's huge database of merchants and shoppers. When on-boarding customers, Affirm offers an eligibility check in seconds without impacting the user’s credit score or requiring their social security number.
Of the funding round, Levchin said, “We’re excited about this vote of confidence from both new and existing investors as we advance our mission to build honest financial products that improve lives.” The company also introduced a high-yield savings account, as well as an interest-free biweekly payment product for transactions as low as $50. Levchin stated, “alongside this new capital, our latest product is another step towards becoming as ubiquitous as credit cards - Affirm is now an even more attractive payment option for everyday wants and needs.”
In July, The Wall Street Journal shared that the startup consulted with Goldman Sachs for a potential IPO valuing the company at almost $10 billion. The funding round, however, closes months of rumors that Levchin was going to take his fintech public through a special purpose acquisition company (SPAC).