Affirm is building its business by focusing on lending to the millennial market, those under 35 years of age. They tend to have thin credit histories, and surveys show they generally have a lowly opinion of banks.
To date, Affirm’s main product is a credit card alternative for online merchants — installment loans from three months to a year. To seek a loan, an applicant provides a few items of personal information — name, phone number, birth date and the last four digits of the person’s social security number. Then, Affirm’s algorithms pore through all kinds of data from credit bureau reports to social networks. More than 100 online merchants have signed up with Affirm, which has made more than USD 100 million in loans.
The new funding brings the total Affirm has raised to USD 325 million. Most of the USD 275 million being raised is debt capital, but the company is not disclosing the debt and equity portions. The new round was led by Spark Capital Growth, joined by new investors Jefferies and Andreessen Horowitz and existing investors Khosla Ventures and Lightspeed Venture Partners.
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