Credit Card Alternative Affirm Raises $500 Million

By Annie Baker ● September 18, 2020
  • Affirm — a flexible and transparent alternative to credit cards — announced it has raised a $500 million Series G round of funding

Affirm — a flexible and transparent alternative to credit cards — announced it has raised a $500 million Series G round of funding. This round of funding was led by existing investor GIC and Durable Capital Partners LP. Other existing investors that joined the round include Lightspeed Venture Partners, Wellington Management Company, Baillie Gifford, Spark Capital, Founders Fund, and Fidelity Management & Research Company LLC. Including this funding round, Affirm has raised over $1.3 billion from investors to date.

Currently, Affirm provides over 5.6 million U.S. and Canadian consumers a better alternative to traditional credit cards by giving them the flexibility to buy now and pay over time at virtually any store. The company’s merchants include brands like Walmart, Peloton, Oscar de la Renta, Audi, and Expedia. And the customers also span verticals including home and lifestyle, travel, personal fitness, electronics, apparel and beauty, auto, and more. 

Affirm is also introducing an interest-free biweekly payment product for transactions as low as $50. Like Affirm’s existing monthly payment options, consumers will not be charged late or hidden fees when using this new product.

Upon choosing to pay biweekly with Affirm, consumers can check eligibility in seconds without impacting their credit score or inputting their social security number. And for merchants, adding Affirm is simple and can take as little as one hour.

By offering Affirm as an option, the company’s 6,000 merchant partners can drive overall sales, grow average order value (AOV), and increase repurchase rates. Last year, merchants using Affirm reported 85% higher AOVs when compared to other payment methods and 67% of Affirm purchases were from repeat users.

This announcement comes on the heels of recent company news like:

1.) Shopify’s selecting of Affirm as its exclusive partner to power Shop Pay Installments, bringing Affirm to hundreds of thousands of new merchants and their customers later this year.

2.) The introduction of Affirm Savings, a high-yield savings account.

3.) And the launch of numerous merchant partnerships over the last month including Bonobos, Callaway Golf, David’s Bridal, Urban Stems, and Nutribullet.

KEY QUOTES:

“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.”

“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. We can also now better support merchants who offer smaller ticket items and bring their customers a more transparent, flexible way to pay.”

— Max Levchin, CEO and founder of Affirm.