Affirm aims for US$9bn with its initial public offering
at the end of November 2020 and backed by Morgan Stanley, Goldman Sachs, and Allen & Company, Affirm’s initial low-ball figure of $100m has now been eclipsed. News that its revenue had increased 93% last year may have influenced the jump.
Reuters reports that the company intends to sell shares between $33 and $38 each, raising $935m in total. PitchBook cites Affirm’s overall goal as triple its valuation since its last funding round ($3bn)
In addition to this latest development, Affirm has also started 2021 by the acquisition of announced in mid-December. One of Canada’s preeminent examples of ‘buy-now-pay-later’ retail - - it aims to provide a flexible alternative to traditional credit options.
Afirm’s CEO and Founder Max Levchin described this new move as an important step in broadening the company’s diverse presence in North America:
“We welcome the PayBright team to Affirm and look forward to leveraging our highly complementary merchant relationships and cultural values.
“Together, we are well-positioned to provide even more consumers with increased control and flexibility in their purchasing decisions and to bring merchants more opportunities to accelerate their businesses.”
“The PayBright team is excited to join forces with Affirm and bring the best of both companies to merchants and consumers,” added Wayne Pommen, President and CEO of PayBright.
“With this combination, we can take Buy Now, Pay Later to a much larger scale in Canada across all retail channels.”
Buy now, pay later
Granting customers the ability to purchase an item on point of sale (POS) credit and then repay according to a fixed scheme. Like other forms of credit, it requires adequate checking, qualification and verification before payment can be processed.
Affirm’s platform allows users to select it at checkout, choose their preferred repayment schedule and loan amount. The company prides itself on having no hidden fees; in fact, it held a specific campaign (‘No Gotchas’) against them during the holiday season.
“Traditional financial institutions rake in billions of dollars in profits each year from late and hidden fees at the expense of consumers,” said Greg Fisher, Chief Marketing Officer.
“These fees can cause people to fall into spiralling debt, which is why Affirm is committed to never surprising people by charging hidden or late fees.”
Fintech Timeline: Tink’s acquisition by payments leader Visa
Tink was founded in Stockholm, Sweden. The company’s integrated, API-based approach was soon met with widespread acclaim for its ability to enhance the customer experience, streamline payments and increase financial transparency.
Through its technology, users can access aggregated financial data, utilise smart finance tools (risk insights, account verification, etc.), and create personal finance management solutions. Tink had become an early leader in a trend still gaining momentum today: Open Banking.
2014 to 2017
The fintech’s Series A, B, and C rounds netted $4mn, $10.2mn, and $14mn respectively. In a short span of time, Tink had already elevated itself to being one of Europe’s leading Open Banking platforms.
- 400 employees
- Serves 18 markets
- Covers over 3,400 banks
- Customer reach of more than 250 million
2018 to 2019
Tink democratised API by launching a platform specifically for developers. This empowered third-parties to create next-gen products for customers.
Furthermore, Tink consolidated its leading position in Europe with expansions in Italy, Portugal, and Spain, as well as appointing former Stripe employee Rafael Plantier as its Country Manager of UK & Eire.
Despite the COVID-19 pandemic, Tink managed to maintain the momentum of the previous year and secured an additional $213mn from two venture capital rounds in January and December.
In May, Tink joined forces with American Express as the latter entered the European Open Banking market. This news was exciting in and of itself, but it paled in comparison to the surprise development on 24 June that Visa had signed an acquisition agreement for the sum of $2.15bn.
“Visa is committed to doing all we can to foster innovation and empower consumers in support of Europe’s open banking goals,” said Al Kelly, CEO and Chairman of Visa. “By bringing together Visa’s network of networks and Tink’s open banking capabilities we will deliver increased value to European consumers and businesses with tools to make their financial lives more simple, reliable and secure.”
“For the past ten years we have worked relentlessly to build Tink into a leading open banking platform in Europe, and we are incredibly proud of what the whole team at Tink has created together,” added Daniel Kjellén, CEO and Co-Founder of Tink.
“Joining Visa, we will be able to move faster and reach further than ever before. Visa is the perfect partner for the next stage of Tink's journey, and we are incredibly excited about what this will bring to our employees, customers and for the future of financial services.
Pictured (left to right): Daniel Kjellén (CEO) and Fredrik Hedberg (CTO)