Max Levchin’s Affirm raises $200 million at a nearly $2 billion valuation

Affirm, the platform that helps consumers find financing, is getting some financing of its own.

The San Francisco-based company confirmed that it’s raising $200 million, led by GIC, a Singaporean sovereign wealth fund. Existing investors Khosla Ventures and Spark Capital are also participating.

Affirm’s valuation is estimated to be between $1.5 billion and $2 billion, as first reported by The Wall Street Journal. Investors are betting on Max Levchin, the PayPal co-founder who runs Affirm.

“The growth of the company has been excellent,” Levchin told TechCrunch. But he wanted to emphasize that he’s not celebrating the round. “Funding is not winning,” he said. It means you’re “committing yourself to a higher outcome.”

It’s a capital-intensive business and the financing will help it grant more loans. As of April this year, Affirm had already facilitated one million loans, totaling an estimated $1 billion.

Affirm helps customers break large payments into monthly payments, to make things more affordable in the short run. Before buying something, Affirm users can determine how long it will take to pay it off.

Levchin likes to characterize Affirm as more ethical than its competitors because it only lends to people who it believes can afford it. There’s no hidden fees or compounding interest.

The company recently rolled out its app to make it easier to expand beyond e-commerce into in-store purchases. There’s an “unstoppable list of things we want to build for our merchant partners,” he said.

Affirm is part of a wave of businesses that are looking to provide an alternative to credit cards. Square recently introduced consumer financing. 

Young people are increasingly shunning credit because they are concerned about mounting debt. Levchin says that they’ll be developing educational tools to help people manage their finances.

Right now, most of its customers are Gen X or younger and live throughout the U.S. He said it’s less popular in the major cities on the East and West Coasts and that most of Affirm’s customers live at least 100 miles from the ocean.

Levchin plans to use some of the funding for international expansion. They will also be opening a New York office.

When it comes to IPO possibilities, Levchin says he’s “not opposed to the idea,” but they’re “not in a huge hurry to take the company to public.”

Affirm previously raised funding from Lightspeed Venture Partners, Andreessen Horowitz, Founders Fund and others.