San Francisco-based Affirm is aiming to take on Visa, MasterCard, American Express and Discover for consumer loans. The firm raised $275 million in debt and equity financing this week.
The financial technology company is led by PayPal co-founder Max Levchin and Spark Capital Growth led the investment and was joined by other new investors Jefferies and Andreessen Horowitz and existing investors Khosla Ventures and Lightspeed Venture Partners.
Affirm lets shoppers pay for purchases across multiple months via transparent, simple interest loans.
Affirm’s first product – Buy with Affirm – allows online shoppers to pay for purchases in multiple monthly installments. Affirm’s clearly stated, simple financing costs can be less than credit card interest rates. For consumers, Buy with Affirm can offer meaningful savings compared to revolving credit lines. For online merchants, integrating Affirm increases Average Order Values (AOVs) and conversion rates by more than 20% and increases purchase sizes by 79-84%, by providing consumers with access to fairly-priced, real-time credit, while promoting financial responsibility.
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