Sixth Street to Fund $4B of Affirm BNPL loans
Affirm Holdings, the pioneer of buy-now-pay-later, has announced its largest financial commitment to date through a partnership with Sixth Street. The three-year forward flow agreement allows Sixth Street to invest up to $4 billion in Affirm loans using an asset company structure, potentially backing over $20 billion in loans over the next three years.
The agreement intends to provide Affirm with more off-balance-sheet funding as it expands its payment network, which now serves over 19 million active consumers.
“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.
San Francisco-based Affirm’s total funding capacity has reached $16.8 billion, representing more than 50% growth over two years. The company has generated more than $28 billion in gross merchandise volume (GMV) for the 12 months ending September 30, 2024. The company maintains diverse funding channels including warehouse facilities, forward flow agreements, and asset-backed securitizations, working with over 130 distinct investors.
The Affirm-Sixth Street partnership follows numerous large collaborations between investment firms and financial technology lenders in recent months. In October, Blue Owl Capital announced it will commit to purchasing up to $2 billion of consumer loans from Upstart, an AI-driven fintech lender, over 18 months. The deal includes an initial acquisition of a $290 million personal loan portfolio, which closed in September.
Fortress Investment Group recently signed a $2 billion loan platform agreement with SoFi Technologies for personal loans, as well as an undisclosed forward flow purchase agreement with New Silver, a lending platform that offers real estate investors quick financing for new construction and fix-up loans.
