Ahead of potential IPO, Affirm raises another $500 million
As more consumers look for alternatives to credit cards, investors are flocking to point of sale credit firms, with Affirm raising a fresh $500 million.
GIC led the round with other investors including Lightspeed Ventures and Wellington Management Company. Affirm has raised more than $1.3 billion and is reportedly preparing an IPO that could value the company as high as $10 billion.
Affirm, which has a merchant network of about 6,000 retailers, is adding an interest-free biweekly payment option for transactions as low as $50, adding to its existing range of point of sale credit options.
Affirm competes with traditional credit cards and other point of sale credit companies such as Klarna and Splitit that sell an alternative to revolving debt. These firms have reported high growth over the past few months as the coronavirus sparks a corresponding financial crisis.
Affirm, which also added a high yield savings account this year, got an additional boost earlier this year via a partnership with Shopify, which has more than 1.2 million sellers on its network that will gain preferential position with Affirm for point of sale credit.
Other merchants such as Bonobos, Callaway Golf, David's Bridal, Urban Stems and Nurtribullet joined Affim's network this year.