Affirm raises USD 100 mln in Series D to expand beyond loans

Techcrunch.com reports that while some of Affirm’s loans are packaged and sold to third-party banks, the company also carries some directly on their balance sheet. So, one reason for the large funding round was to prepare the balance sheet for a deluge of new loans that the company expects to issue over the next 6-12 months.

Considering that most people use Affirm a few times a year to buy big-ticket items like a Boosted Board or Casper Mattress, the company is striving to reach a future where a user’s regular purchases are backed by Affirm loans. In addition, since the vast majority of these more regular retail purchases still happen in brick and mortar stores, Affirm is going to have to expand its current selection of merchants, and maybe even partner with some big-box stores like Target or Walmart.

Affirm’s product, which is essentially a fixed-rate loan, is very different from a credit card’s revolving line of credit. These loans have no late fees, no compound interest, and no “balance” to be carried.

The startup, built by PayPal co-founder Max Levchin, will use some of this new funding to develop a host of services outside of traditional financing, all designed to grow and increase user engagement.

While Affirm hasn’t revealed what these products will look like, they made it clear that the new services are designed to be used by Affirm users on a daily basis. These new products could be things like money management help, budgeting tools, or even something to help with overall personal financing decisions.

Also, Affirm will soon start reporting both positively and negatively to the major credit bureaus, which could help successful Affirm repayments translate into better overall credit for those that are young or just underserved by FICO credit scoring.