Affirm, the company that Max Levchin started to provide installment loans to consumers at the point of sale, has raised $275 million in a round of debt and equity financing led by Spark Capital Growth and joined by new investors Jefferies and Andreessen Horowitz and existing investors Khosla Ventures and Lightspeed Venture Partners.
Banks and financial institutions have not created products that serve younger generations in the most efficient way, according to Max Levchin, the co-founder of eBay-owned payments giant PayPal. It’s a major opportunity for startups that seek to rethink financial technology—one Levchin hopes to leverage with his own, Affirm. The young company has tasked itself with rethinking the way people—particularly millennials—borrow money, allowing them to obtain a micro-loan at a point of sale instead of using a credit card. The difference? Affirm charges an upfront fee for the service, typically between 6% and 30%, rather than tack on interest in the wake of the transaction.)