Alternative payments startup Affirm announced today a massive $500 million series G round of funding.
GIC and Durable Capital Partners led the investment, which brings the company’s total raised to over $1.3 billion since its 2012 inception. Also participating in the round were returning backers Lightspeed Venture Partners, Wellington Management Company, Baillie Gifford, Spark Capital, Founders Fund and Fidelity Management & Research Company.
The company’s last raise was a $300 million Series F round in April 2019 at a $2.9 billion post-money valuation.
PayPal co-founder Max Levchin helped launch Affirm in 2012 to provide consumers a replacement for credit cards. Its mobile app offers installment loans to consumers at the point of sale.
Affirm’s outsized round is a testament to the increased popularity of the “Buy Now, Pay Later” movement, which has gained serious traction as of late – especially during the COVID-19 pandemic.
“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,” said Max Levchin, CEO and founder of Affirm, in a written statement.
The company also announced it is introducing an interest-free biweekly payment product for transactions as low as $50. The goal is to support merchants who offer smaller ticket items in addition to those who sell higher-priced goods.
Affirm pledges that consumers “will never be charged late or hidden fees when using this new product.”
“Alongside this new capital, our latest product is another step towards becoming as ubiquitous as credit cards,” Levchin said.
When choosing to pay biweekly with Affirm, consumers can check eligibility in seconds, “without impacting their credit score or inputting their social security number,” according to the company. Affirm also claims that merchants can add its payment capabilities in “as little as one hour.”
The company currently has 6,000 merchant partners. In 2019, merchants using Affirm reported 85% higher “average order value” (AOV) when compared to other payment methods, the company claims. It recently inked deals with Callaway Golf, David’s Bridal and Nutribullet and has partnerships with Walmart, Peloton, Expedia and Audi, among others.
In July, the Wall Street Journal reported that Affirm was laying the groundwork for an initial public offering that could value the company by as much as $10 billion, according to people familiar with the matter. No word yet on if that’s still in the works in light of the new funding round.