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September 23, 2021Blog Posts

Fintech Lender Affirm Leans on Investors to Fund Rapid Growth

The Wall Street Journal

Fintech lender Affirm Holdings Inc. is relying more on financing from investors instead of lenders to fund its growth as its “buy now, pay later” installment plans are becoming more popular.

“Buy now, pay later” loans often appeal to customers who don’t qualify for credit cards or prefer fixed-payment plans. Consumers spent between $15 billion and $20 billion using such loans on e-commerce purchases in 2020, up from $6 billion to $9 billion in 2019, according to estimates from credit ratings firm DBRS Morningstar.

“Buy now, pay later” has also been a focus of recent deal activity. Payments company PayPal Holdings Inc. this month said it would purchase Japanese startup Paidy Inc. for $2.7 billion, following an agreement last month by Square Inc. to acquire Australia’s Afterpay Ltd. for $29 billion.

San Francisco-based Affirm offers short-term loans to customers at the point of sale—for example when checking out online—with payment terms ranging from three months to five years. The company, which went public in January, offers its “buy now, pay later” loans through partnerships with companies such as Walmart Inc., Amazon.com Inc. and Peloton Interactive Inc. Gross merchandise volume, which measures all retail transactions on Affirm’s platform net of refunds, was $2.5 billion during the quarter ended June 30, about double the amount from a year earlier.

Affirm to Participate in Upcoming Investor Conferences

Source

New research from The Strawhecker Group analyzes key trends and consumer attitudes.

Download a free infographic covering several findings from the full report.

Consumers have increasingly adopted Buy Now, Pay Later (BNPL) services for multiple reasons; a desire for financial flexibility, a way to avoid incurring credit card debt, or to purchase items outside of their budgets. However, despite its popularity, consumer debt and missed payments have led to calls for additional research and regulation. Read the press release.

To take a closer look, The Strawhecker Group (TSG) conducted a survey of over 1,500 U.S. consumers in early 2021 with the goal of understanding domestic attitudes and perspectives on the use of BNPL services. The complete findings, a selection of BNPL provider profiles, and market landscape details can be found in the firm’s new report Buy Now, Pay Later: An Analysis of Key Trends and Consumer Attitudes.

Highlights of this extensive 81-page report include:

  • Buy Now, Pay Later Background
  • Key Players in the Buy Now, Pay Later Space
  • Buy Now, Pay Later Consumer Survey
  • Concluding Thoughts: The Future of Buy Now, Pay Later
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