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SAN FRANCISCO, December 13, 2024--(BUSINESS WIRE)--Affirm Holdings, Inc. (NASDAQ: AFRM), the payment network that empowers consumers and helps merchants drive growth, and Sixth Street, a leading global investment firm, today announced that they have entered into a long-term capital partnership whereby Sixth Street through its Asset Based Finance platform will invest up to $4 billion by purchasing Affirm loans in a unique AssetCo structure pursuant to a three year, forward flow agreement.
The transaction represents the largest capital commitment secured by Affirm to date. It offers flexibility, commitment, and alignment from both partners and provides additional off-balance sheet funding 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. As an industry-leading underwriter, Affirm offers easy-to-use solutions for merchant partners and access to transparent and flexible financing for consumers, creating attractive risk-adjusted assets and bringing depth to the partnership.
"We are honored to establish this new long-term partnership with Sixth Street as we continue to strengthen and diversify our platform to support our ambitious growth plans with capital efficient funding," said Brooke Major-Reid, Chief Capital Officer at Affirm. "Sixth Street’s expertise in asset-based finance, long-term capital and collaborative approach make them an ideal partner for Affirm. Over the last several years, we have been extremely thoughtful in working with a diverse mix of world-class investors as we empower more consumers and merchants with our honest financial products."
"Affirm’s ability to provide flexible, scalable financing solutions is unparalleled, and we see tremendous opportunity in this partnership," said Michael Dryden, Partner and Head of Asset Based Finance at Sixth Street. "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."
"This partnership represents a major step forward in how we support Affirm’s future growth plans as we continue to generate quality assets at scale by underwriting every transaction," said Michael Linford, COO at Affirm. "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."
Affirm maintains a diverse and durable funding model across multiple channels, including through warehouse facilities, forward flow agreements, and asset-backed securitizations. With more than 130 distinct investors representing a broad range of institution types, Affirm intends to continue its approach of regularly adding capacity across channels and building upon its relationships with its long-term capital partners. As of September 30, 2024, Affirm’s total funding capacity was $16.8 billion, which has grown by more than 50% over the last two years.