Affirm, the leading Buy Now, Pay Later (BNPL) provider, has secured off-balance sheet funding from New York Life, positioning the company to support up to $1.75 billion in consumer loan volume annually. This collaboration builds on a long-standing capital relationship between Affirm and New York Life, with the new agreement extending through December 2026.
Under the terms of the deal, New York Life will purchase Affirm’s installment loans on a forward-flow basis, with an outstanding amount of up to $750 million. This strategic move will help Affirm continue to expand its flexible and transparent payment options for consumers, as the company continues to grow in the fast-paced BNPL space.
“Through our collaboration, we will be even better positioned to responsibly increase access to our flexible and transparent payment options,” said Michael Linford, Affirm’s Chief Operating Officer.
Expanding Capital Partnerships: Affirm and New York Life
This new funding agreement marks an important expansion of the long-term capital relationship between Affirm and New York Life, which already had invested nearly $2 billion in Affirm collateral before this deal.
Brendan Feeney, Managing Director at New York Life, emphasized the growing success of the partnership, noting, “Affirm has distinguished itself by delivering superior credit outcomes that generate attractive returns.” He added, “We’re excited to take this next step in our relationship, which exemplifies how we collaborate with industry leaders to invest in growing, high-quality assets.”
This partnership provides Affirm with more resources to continue meeting the growing demand for BNPL services. The funding will allow Affirm to increase the availability of its consumer financing solutions, benefiting customers who seek to pay for purchases over time without the burden of late fees or hidden charges.
Affirm’s Growth in the BNPL Space
Affirm’s impressive growth over the past year is reflected in its June quarterly results, with key metrics showing strong momentum in both online and in-store purchases.
- Gross merchandise volume (GMV) increased by 34% to $10.4 billion.
- Revenue rose by 33% to $876 million.
- The number of active consumers (excluding the discontinued Returnly business) increased by 24% to 23 million.
- The number of active merchants grew by 24%, reaching 377,000.
Max Levchin, Affirm’s CEO, highlighted the significance of this growth during the earnings call, saying:
“On the demand for our service, you see the acceleration in GMV and the new record in that sense. It is also a reflection of the fact that folks are using Affirm for more and more things.”
This robust growth is not only driven by the increasing popularity of BNPL as a payment method but also by strategic partnerships Affirm has formed with several major companies in the past year.
Key Affirm Partnerships and Expansions
Affirm continues to strengthen its market position through a series of new or expanded partnerships that integrate its BNPL services into key platforms and retailers:
- Worldpay: Affirm integrated its BNPL options into Worldpay’s embedded payments offering for software platforms, helping small businesses offer flexible financing options to their customers.
- Wayfair: Affirm’s BNPL services are now directly integrated into Wayfair’s checkout process, allowing customers to finance their purchases seamlessly while shopping for home goods.
- Fanatics: Affirm has partnered with Fanatics, the leading online sports merchandise retailer, to provide flexible installment plans for sports fans purchasing memorabilia and apparel.
- FreshBooks: Affirm has also integrated its BNPL options into FreshBooks, a financial software platform used by small businesses for invoicing and accounting.
- These partnerships not only expand Affirm’s reach but also solidify its role as a leading player in the growing installment-based payment solutions sector.
The Future of Affirm’s BNPL Services
With the backing of New York Life and strong performance in key metrics, Affirm is poised to continue expanding its BNPL offerings to meet the increasing demand for flexible payment options. The company’s ongoing efforts to partner with major retailers and software platforms will likely accelerate its growth, further integrating Affirm’s services into consumers’ everyday purchasing experiences.
The future of Affirm will also be shaped by the broader BNPL industry trends, including increasing adoption among both merchants and consumers. As more retailers integrate BNPL solutions into their checkout processes, Affirm’s role in the payment ecosystem is expected to strengthen, with the potential for further funding deals to support even larger loan volumes.
FAQs
What is the new funding agreement between Affirm and New York Life?
Affirm has secured a $750 million off-balance sheet funding deal with New York Life, which will allow the company to support up to $1.75 billion in consumer loan volume annually through 2026.
How will the funding impact Affirm’s operations?
The funding will help Affirm expand its BNPL services, enabling the company to meet growing demand for flexible consumer payment options.
What are Affirm’s recent performance highlights?
In its latest quarter, Affirm reported a 34% increase in GMV, 33% revenue growth, and a 24% rise in active consumers, reflecting strong demand for its BNPL offerings.
Which companies has Affirm partnered with recently?
Affirm has expanded its partnerships with Worldpay, Wayfair, Fanatics, and FreshBooks, integrating its BNPL services into these platforms to offer customers flexible payment options.
How will Affirm use the new funding?
The new funding will enable Affirm to expand its consumer loan volume and provide more financing options to customers, helping drive further adoption of its BNPL services.