Affirm Inc. has raised $45 million to help it target consumers looking for new credit tools to make purchases online, Chief Executive Officer Max Levchin said at Bloomberg's Next Big Thing Summit.
Affirm's system now offers shoppers financing in a matter of seconds, Levchin said June 9 at the event in Sausalito, Calif. The company, whose funding is in equity and debt, could change the way consumers approach payment options by eliminating the need for credit cards, he said. Affirm's investors include Khosla Ventures and Lightspeed Venture Partners. Levchin didn't disclose the startup's valuation.
Levchin sees fresh opportunities to shake up the payments industry even after PayPal, which he co-founded and is now owned by eBay Inc., emerged as the leading way to transact on the Internet. Affirm, whose team includes former PayPal workers, already has several retail partners, such as Faraday Bicycles Inc. and online secondhand-clothing seller Twice, he said.
"It's an attempt to completely reinvent consumer finance," he said.
With Affirm, a user types in some basic information such as a name and phone number, and after verifications and approvals, the company lends money to the buyer "on the spot," Levchin said. That could mean paying for something in three payments instead of all at once. That option could appeal to a younger generation of consumers who are increasingly making purchases online, he said.
"Millennials love it," Levchin said, using the nickname that usually refers to the demographic group born in the 1980s and 1990s. "Sixty percent of Millennials say they don't trust their credit card. We think we've come up with a product to address that market."