Affirm combines next-gen scoring in a POS credit service

Affirm, the online lending start-up co-founded by one of former founders of PayPal, Max Levchin, has raised a further $100m in its latest funding round, led by the other former PayPal founder, Peter Thiel, pushing its valuation to $800m. The company offers on-the-spot financing to shoppers at the checkout stage of the online shopping process. It targets millennial shoppers, who typically have short credit histories using an algorithm to scan a variety of data including social media and online bill payments history to determine credit scores. Currently available at more than 700 online and physical stores, Affirm plans to use the new cash to grow its retailer base and make more loans, it also plans to establish itself as a platform for everyday use, introducing a range of services to offer directly to consumers, including financial management tools and loyalty rewards.

Affirm, a San Francisco-based consumer lending company, said on Tuesday that it had raised $100 million in new funding, at a time when start-up fund-raising has become more difficult.

The financing pushes the company’s valuation to $800 million, according to data from PitchBook, which tracks venture capital financing data. The new round follows $275 million worth of equity and debt fund-raising less than a year ago. At the time, Affirm was valued at $576 million, according to PitchBook, which added that more of that round was debt than equity.

In total, Affirm has now raised $425 million in equity and debt. The company declined to comment on its valuation.

Affirm’s new funding stands out because nine-figure rounds of fund-raising have been on the wane this year as investors have pulled back from putting money into privately held tech start-ups. Some companies are instead raising money at lower valuations than in the past, a phenomenon known as a “down round.” Yet Affirm’s valuation has grown by nearly 39 percent in this climate.