Payment solution Affirm has closed a $200m Series E round of funding led by GIC.
US-based Affirm allows consumers to pay for purchases over a monthly instalment period, with simple loans that don’t have compounding interest or late fees. The company settles the bill with the merchants within three business days, and takes on all issues associated with repayment and fraud, removing risk for sellers.
Loans can be repaid over three, six or twelve-month periods, and at a rate between 10 – 30 per cent, depending on credit scores.
The line of equity will be used to increase the company’s credit distribution capacity, and to grow its partnerships team, which currently has more than 1,200 merchants. Some of the Affirm’s partnerships include Wayfair, Expedia, Goodyear, Motorola, DJI, Casper, and Cole Haan.
Some of the funding will also be put towards the introduction of new products and services, which are beyond POS credit. New offerings will be made available through the newly launched app, which is available on iOS and Android.
Affirm founder and CEO Max Levchin said, “Our goal is to be the app on your home screen for all of your financial needs. We are starting by reinventing credit because we believe it is fundamentally broken. But, this is just the beginning.”
This latest wave of funding brings the company’s total funding efforts to $450m. Last year, the firm raised $100m in a credit facility from Morgan Stanley, as Affirm looked to increase its POS financing levels.
Earlier in the year, Affirm surpassed one million consumer instalment loans processed. The loans are made by its partners Cross River Bank and Member FDIC.
Last month, GIC led a £90m investment into challenger bank OakNorth for a 10 per cent stake in the company. The investment came just a month after the bank had raised a £154m investment round from The Clermont Group, Toscafund and Coltrane.
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