Affirm was started by Max Levchin, who co-founded PayPal. In April, PYMNTS spoke with him about financial literacy initiatives.
New York venture capital firm Thrive Capital is reportedly at the helm of the financing and Spark Capital is participating. Affirm is getting the capital mostly from a line of credit coming from a large financial institution.
Recently, Affirm raised $300 million in a Series F round led by Thrive, at a valuation of $3 billion. Because of the nature of its business, companies like Affirm need huge amounts of capital.
So far, Affirm has raised $1.03 billion from companies like Ribbit Capital, Founders Fund, Andreessen Horowitz, Khosla Ventures, Lightspeed Venture Partners and others.
Affirm gives shoppers payment plans for smaller items, and allows them to create their own personalized plans. The company requires no minimum credit score or income reporting. The company makes money the same way a credit card company does, with interest.
Many companies are moving into the area of B2B and consumer lending, and Affirm is no different. It recently introduced a financial services company called Resolve, which boasts a “buy now, pay later” model aimed at businesses.
“Traditional B2B financing is slow, inaccurate and limits a business’s potential for growth because of an over reliance on email, call centers, faxes and manual invoicing processes,” Resolve wrote in a press release. “Today, many companies offer a standard net 30-day payment plan only to their best and longest tenured customers, leaving others in need of financing to rely on credit cards or installment loans.”
U.S. FinTech investment is constantly reaching new highs. In the first eight months of the year, there was $10.5 billion put into the space, which almost matches the total $11.6 billion from last year. Around the world, FinTech investment is up as well, with $20 billion invested so far this year.