M&A / FundingPayments

Affirm to acquire Canada’s PayBright in $265.5 million deal

PayBright has a “first-mover” advantage in Canada that would help Affirm grow, company says

Alternative payments provider Affirm has entered into an agreement to acquire Canada-based “Buy Now, Pay Later” provider PayBright in a cash and equity transaction worth about CAD$340 million, or $265.5 million.

The acquisition would help expand San Francisco-based Affirm, which recently filed for its IPO, have more scale and reach with a larger merchant network across the U.S. and Canada. PayBright also has a “first-mover” advantage in Canada that would help Affirm grow.

“As part of a larger, multinational organization, we can help even more merchants attract new customers and provide a greater number of consumers with more control and flexibility in their purchasing decisions,” PayBright CEO and President Wayne Pommen said in a written statement.

The two companies have “complementary merchant relationships and deeply aligned cultural values,” according to Affirm.

The acquisition, which is slated to close in the 2021 first quarter, is not the first for Affirm. In 2016, the San Francisco-based company bought Sweet and in 2015, it picked up LendLayer.

Background

In November Affirm filed its  S-1 with the U.S. Securities and Exchange Commission, which gave us a glimpse into its financials. The filing also came on the heels of it confidentially filing to go public in October and a $500 million fundraise in September. That investment brought the company’s total raised to over $1.3 billion since its 2012 inception from backers such as Khosla Ventures, Founders Fund, Lightspeed Venture Partners, Spark Capital, Fidelity and Andreessen Horowitz (a16z).

PayPal co-founder Max Levchin helped launch Affirm to provide consumers a replacement for credit cards. Its mobile app offers installment loans to consumers at the point of sale.

Affirm said it has yet to determine neither the number of shares it plans to offer nor the price range. But it did list a proposed maximum offering price of $100 million as is customary in such filings. It also noted that it plans to list its common stock on the Nasdaq Global Select Market (“Nasdaq”) under the symbol “AFRM.”

In its S-1, Affirm revealed both increased revenue and net loss so far in 2020.  Specifically, the company’s revenue surged 93 percent to $509.5 million in its fiscal year ended June 30, 2020, compared with $264 million in its previous fiscal year. At the same time, its net loss declined slightly – to $112.6 million for the fiscal year ended June 30, 2020, compared to $120.4 million in its last fiscal year.

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