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Affirm secures a $4 billion loan deal from Sixth Street #Affirm, a leading #fintech platform reshaping consumer financing, has secured a landmark $4 billion capital partnership with global investment firm Sixth Street. This deal, facilitated through #SixthStreet's Asset Based Finance platform, marks Affirm’s largest capital commitment to date and will fund up to $20 billion in loans over the next three years. The innovative AssetCo structure enables Affirm to expand its payment network while maintaining capital efficiency and off-balance sheet funding. Founded by Max Levchin, Affirm provides more than 19 million active consumers with transparent, flexible payment options, empowering merchants to drive growth and delivering honest financial products without hidden fees. This partnership underscores Affirm’s competitive edge as a premier underwriter, offering scalable and risk-adjusted financing solutions. Sixth Street, renowned for its expertise in asset-based finance, joins Affirm's diverse network of over 130 global investors, further solidifying its funding model, which spans warehouse facilities, forward flow agreements, and asset-backed securitizations. Affirm’s COO, Michael Linford, emphasized the importance of this partnership in scaling their innovative financial solutions and generating high-quality assets. With $28 billion in gross merchandise volume (GMV) over the past year and a total funding capacity of $16.8 billion as of September 2024, Affirm continues to redefine consumer finance while scaling its network and partnerships in the growing fintech market. The article on Finextra in the first comment.

2025 begins with an #embeddedfinance-focused deal As more and more users are accustomed to seeing their financial needs fulfilled at point of need, and as non-financial brands continue to benefit from offering these services, expect to see the larger players widen their product ranges to capture as much value as possible. Those who started with payments will acquire non bank lenders. Non bank lenders active on that channel may wish to own the payment stack. Banks, having both, will lean further into #BaaS business models. It’s slow, but it’s trending in absolutely the right direction #aquisition #fintech #m&a #payments #credit https://lnkd.in/e2NKSEkh

Affirm secures $4bn funding deal with Sixth Street amid fintech lending boom: Private lenders expand fintech footprint. The Affirm-Sixth Street deal follows several major partnerships between investment firms and fintech lenders ... #finpeform #fintech

Behind the Idea: Carmoola | The Fintech Times: Aidan Rushby explores Carmoola's journey, the challenges of building a new finance model and his vision for more transparent car finance. #finpeform #fintech

Fintech meets private credit in a game-changing partnership 💳 Affirm has secured its largest-ever capital commitment — a $4 billion partnership with private credit giant Sixth Street. Over the next three years, this deal could fund $20 billion in short-term installment loans for platforms like Amazon and Apple, fueling growth in the buy now, pay later space. This collaboration highlights a key trend: private credit firms turning to fintech as scalable, efficient financing partners. As demand for BNPL surges, innovative funding models like these are redefining how capital flows in consumer lending. What’s your take on this growing fintech-private credit synergy? #fintech #privatecredit #financeinnovation

Consumer lending startups are increasingly adopting creative strategies to offload risk and move loans off their balance sheets. Upstart, for example, recently struck a deal with Blue Owl Capital to sell up to $2b of its consumer loans over the next 18 months. Through this forward-flow agreement, where loans are pre-sold before origination, Upstart can continue expanding its lending operations without the financial burden of holding the loans themselves.   Klarna and SoFi are following similar paths. Klarna, the buy-now, pay-later giant, recently sold a significant portion of its UK loan portfolio to Elliott Advisors, freeing up £30b in capital to support its ongoing growth and gear up for a potential IPO next year. SoFi, on the other hand, reached a $2b deal with Fortress Investment Group to fund the origination of personal loans, allowing it to focus on less capital-intensive operations as part of its broader strategy to diversify revenue.   These deals highlight a broader trend among consumer fintech lenders: selling loans to private credit and hedge funds. For these investors, it’s an opportunity to capture a share of the consumer lending market traditionally dominated by banks. For lending startups, however, it’s a chance to better manage risk and free up equity capital to fund other priorities. Shares of Upstart and SoFi surged following their announcements, signaling market confidence in this off-balance-sheet approach. Sometimes it’s smarter to let someone else hold the bag. Featured Companies: Diesta, Contabilizei, Plaid, Flutterwave, Embroker, Sabi https://bit.ly/3NDdAYc #fintech #fintechnews

Klarna originates loans (offering buy-now, pay-later options to consumers), but instead of keeping these loans on its books, it has sold them to Elliott Investment Management. By selling the loans, Klarna frees up capital, giving it more money to invest in other parts of its business, such as expansion, product development, or preparing for its public debut (Initial Public Offering, IPO). The deal gives Klarna access to £30 billion ($39 billion) over the coming years, providing more resources to fuel its global growth ambitions. Although Klarna has sold the loans, it will continue to manage them—handling customer relationships and payments. This allows Klarna to maintain its customer touchpoints while offloading the financial risk to Elliott. Klarna shares are currently traded at a $11.5 billion valuation, which represents a 72% premium to its last down-round valuation in 2022, though still 75% below its peak valuation from 2021. Both Bloomberg and Fortune anticipate Klarna could go public soon at a $20 billion valuation. On the revenue side, Klarna's performance has been solid, with a 27% year-over-year increase. The company is projected to hit $2.6 billion in revenue this year. It’s interesting that despite the market turmoil and an official valuation drop, Klarna's revenue and gross merchandise volume (GMV) have never decreased. Both metrics continue to grow at an impressive pace, especially remarkable for a company of its size. Go Klarna! More about Klarna: https://lnkd.in/eRJiqe9f The Sky Cliff Platform serves as a comprehensive portfolio monitoring solution for the Late-Stage Private Equity Market (pre-IPO), offering independent informational services. Please note that Sky Cliff Professionals does not provide investment or tax advice. Potential investors are advised to seek specialized independent tax and financial advice before investing in any alternative investment. Past performance does not guarantee future returns, and investments involve risks to your capital. #Klarna #IPO #PreIPO #Secondaries

As the year comes to a close, reflecting on the changes I have seen in lending recently. It was only a few years ago that lenders started to dabble in some forward-thinking yet relatively simple concepts like how to offer a better installment, revolving, and working capital experience. But companies like Parafin, Rho, and Fundbox saw the signs ahead and placed some smart bets – they pioneered hybrid lending structures. In a hybrid structure, for instance, the loans move between revolving and installment based on borrower performance and cash flow needs. Fast forward, firms like Mondu and Resolve are pushing the boundaries of dynamic lending and servicing even further, adjusting payment schedules and loan terms as needed. And then you have fintechs like Uncapped, Capchase, and Pipe introducing revenue-based repayments, tying loan performance directly to a borrower’s financial health. So, what’s the common thread with these lending businesses? They all saw the writing on the wall, so they rallied the resources to integrate finance products quickly based on their customers’ genuine, real-time needs. Beyond integration, though, dynamic lending structures allowed these lenders to adjust their offerings as new opportunities presented themselves continually. We’ve made some big bets ourselves here at Canopy. Our vision has always been to help lenders move beyond basic lending constructs into more innovative and hybrid products. We’ve been building toward this future for a while now. And it is finally, unequivocally here. Very excited for 2025!

Is Upstart (UPST) the Future of Lending? Our latest analysis dives into Upstart's AI-powered lending platform & its potential to disrupt the FinTech space! Read & Share to see if UPST deserves a spot in your portfolio! https://lnkd.in/gYE_TXZm #UpstartInvestor #AILending #FinTechRevolution #InvestmentAnalysis #StockMarket

Revolutionizing finance, one innovation at a time! Check out the Top 10 Fintech Companies leading the charge in 2024. These pioneers are shaping the future of banking, payments, and investment. https://lnkd.in/gYr2ykWB #Fintech #Innovation #FutureOfFinance #TechLeaders