Global investment firm Sixth Street is investing up to USD $4 billion in Affirm.

Founded in 2012 by Max Levchin, one of the co-founders of PayPal, Affirm is a financial technology company that offers Buy Now, Pay Later (BNPL) services and provides point-of-sale (POS) loans to consumers through its network of partner merchants.

Its financing model covers several channels, including warehouse facilities, forward flow agreements and asset-backed securitisations.

The long-term capital partnership, which represents Affirm's largest capital commitment to date, will see Sixth Street acquire Affirm's loans in a single assetCo structure as part of a three-year plan.

The deal aims to offer flexibility, commitment and alignment from both partners and provides additional off-balance sheet financing with the ability for Affirm to extend up to more than $20 billion in loans over the next three years as the company continues to scale its payment network.

Michael Dryden, partner and head of asset-based finance at Sixth Street, expressed enthusiasm about the partnership and the “huge opportunities” that lay ahead.

“We look forward to being a key funding partner for Affirm and continuing to build on this relationship to support the company’s growth in the years to come,” he said.

Michael Linford, chief operating officer at Affirm, also emphasised how the partnership represents a major step forward that will aim to further support the company’s future growth plans.

“Our capital markets expertise is an important point of competitive differentiation, and we believe this partnership with Sixth Street’s world-class investment team reinforces that,” continued Linford.

Affirm said it intends to continue adding capacity across its current channels on a regular basis and to strengthen relationships with its long-term capital partners.

As of 30 September 2024, Affirm’s total funding capacity was $16.8 billion, representing growth of more than 50 per cent over the past two years, the firm said in a statement.

The company generated over $28 billion in gross merchandise volume (GMV) over the plast twelve months.

With over $80 billion in assets under management and committed capital, Sixth Street operates nine platforms across its growth investing, adjacencies, direct lending, fundamental public strategies, infrastructure, special situations, agriculture and par liquid credit businesses.

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