Affirm founder and CEO Max Levchin Photo by Vaughn Ridley/Collision via Sportsfile

Not long after raising $300 million at a reported $2.9 billion valuation, TechCrunch reports that Affirm, an online lending startup led by PayPal co-founder Max Levchin, is raising as much as $1.5 billion in debt and equity funding. The report says Thrive Capital, the VC firm that led its $300 million funding, is leading the new financing, with participation from Spark Capital. According to TechCrunch, a significant part of the funding would lie on the debt side, with a line of credit from a large financial institution in the works.

Fintech companies, especially those focused on lending, often raise huge credit facilities or equity funding to sustain operations. For example, Kabbage, an online lender for small businesses, secured a $200 million credit facility sometime in June. Klarna, a Swedish startup that’s in the same market as Affirm, recently raised $460 million in funding. Affirm is an online lender but doesn’t actually lend money directly. It partners with several merchants to let its customers pay for products even when they don’t have the full amount, to later pay back in installments to Affirm. Basically, Affirm handles the full payments, then takes charge of the payback from its customers.

In 2018, Affirm loaned more than $2 billion to its customers. Its users can get loans of up to $15,000 to make purchases, depending on the amount Affirm is willing to put up. Affirm vets its customers by taking into account individual metrics like credit scores alongside other fiscal data points. Over 2,000 merchants currently accept Affirm’s payment service. The San Francisco-based company has raised more than $800 million in equity funding, from investors like Founders Fund, Spark Capital, Lightspeed Venture Partners, Ribbit Capital, Fidelity, Wellington Management, Baillie Gifford and Sound Ventures.

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