Affirm, a Fintech that provides point of transaction access to credit, has been received Unicorn status, according to multiple reports. Affirm is the creation of Max Levchin, a PayPal co-founder, who knows a thing or two about finance.
According to a report in Bloomberg last week, Affirm is raising money at a $1.4 billion valuation. The company is hoping to raise $150 million bringing total funding to date to a whopping $650 million. Big name VCs have rushed to support Levchin’s vision of credit with Khosla Ventures, Founders Fund, Lightspeed Venture Partners and Spark Capital having previously backed the company.
A second report in Axios claims that GIC is leading the funding round and may raise up to $210 million. GIC is Singapore’s sovereign wealth fund with assets of more than $100 billion. GIC is known for its patient capital approach along with a team of 1300 employees to help manage the portfolio. GIC manages most of Singapore’s financial assets.
Affirm is interesting because it provides a financing option that can be more flexible for consumers minus the gotcha fees too many retailers / credit providers sneak in when closing a sale. For retailers, Affirm can make a purchase a far simpler conversion. And who wants to pay 14% interest in compounded credit card payments?
Levchin is not known for mincing words (just like many entrepreneurs). Not too long ago, Levchin explained to the Australian Financial Review;
“Many of the products and profit models from these traditional [financial] institutions are designed to screw the consumer and I think there is an opportunity to build a profitable company that is also fully aligned with the best interests of the consumer.”
Amen.