Affirm, Inc., the company started by serial entrepreneur Max Levchin to provide fair and honest financial services, today announced it raised $200 million Series E round of funding bringing total equity funding to date to approximately $450 million.
GIC led the round and was joined by Khosla Ventures, Lightspeed Venture Partners, Founders Fund, Spark Capital, Caffeinated Capital, Ribbit Capital and others.
“GIC is one of the world’s most respected fund management companies and has been investing in technology for a very long time. We are excited to have GIC as a long term partner that offers a unique network and insights on the evolving global fintech market,” said Affirm’s Founder and CEO Max Levchin.
The new round of financing will be used to further Affirm’s mission to deliver honest financial products that improve lives. Specifically, the new capital will be used to increase Affirm’s credit distribution capacity, grow its family of more than 1,200 merchant partners—which includes Wayfair, Expedia, Goodyear, Motorola, DJI, Casper, and Cole Haan—and introduce new products and services beyond point-of-sale credit via the Affirm app that launched in October and is available in the iOS App Store and Android Google Play.
“Our goal is to be the app on your home screen for all of your financial needs,” said Levchin. “We are starting by reinventing credit because we believe it is fundamentally broken. But, this is just the beginning.”
Affirm makes it possible for shoppers to pay for purchases across multiple months with transparent and simple interest loans that don’t charge compounding interest or late fees, unlike traditional credit cards. Affirm settles with merchants within three business days, guarantees all payments, and takes on issues such as repayment and fraud, requiring retailers to assume little risk.
Nearly 90 percent of consumers say they feel more positively about a brand that offers honest financing, according to research this year by Affirm and Qualtrics of more than 1,000 22- to 44-year-olds in the U.S. 87 percent of respondents expressed interest in a simple way to pay for large purchases over time that was not a credit card. Meanwhile, retailers offering Affirm’s credit card alternative report an average increase of 75 percent in basket size, site-wide conversion rates increases by as much as 20 percent, and revenue per visitor lifts of more than 10 percent.
In April, Affirm announced it had processed over 1 million consumer installment loans, which are made by its bank partner Cross River Bank, a New Jersey State Chartered Commercial Bank, and Member FDIC.