31–40 of 73 posts
I just went through the Peloton flow to see for myself and indeed there's a 0% APR option for 3 years so it's clearly being paid for by Peloton.
It also explains to me why people might choose to use Affirm even if they could afford the upfront cost.
Wonder if I'm the only one surprised by their actual revenue model. I had always assumed they made money off loan interest from consumers which they do, but it turns out over half of their 2020 revenue came from merchant fees instead. I just went through the Peloton flow to see for myself and indeed there's a 0% APR option for 3 years so it's clearly being paid for by Peloton. It also explains to me why people might…
Wonder if I'm the only one surprised by their actual revenue model. I had always assumed they made money off loan interest from consumers which they do, but it turns out over half of their 2020 revenue came from merchant fees instead. I just went through the Peloton flow to see for myself and indeed there's a 0% APR option for 3 years so it's clearly being paid for by Peloton. It also explains to me why people might…
It's a really great deal as a consumer.
Good for them, I'll be buying shortly after their IPO.
Interesting. Overall, I agree with everyone else - Affirm looks like a healthy company. Major takeaways: 1.5% write-off rate for their jan 2020 vintage is very healthy - comparable to the long-term trend for unsecured superprime consumer debt. Given the (I suspect) lower average creditworthiness of Affirm customers, this is a great number. I'd be curious to see their long-term trend for same-age vintages, however. In…
> Consumer credit laws in the US so severely restrict what you can use for credit scoring purposes that better underwriting through data is basically a lost cause, absent some specific customer segment that has special credit situations. Can I inquire what your background is or where you found that information? Many companies supplement credit scores with additional data to make these types of decisions.
affirm is one of those things that was pretty interesting. Coming from a country where micro-installments at PoS was standard, i always thought it was really interesting the US didn't have it. Good for them, I'll be buying shortly after their IPO.
Earlier quoted context omitted.
From a quick glimpse, the business model of Affirm seems to be about letting people get loans for things they would previously have to save for. In other words: Before: Alice wants to buy a chair that costs $100 from Bob. Alice saves $10 a month and buys a chair. Bob got $100. Alice can buy a new chair every 10 months. She may also conclude after 10 months, that she doesn't want the chair that badly, and would instea…
The "before" was applying for a store-branded credit card at the point of sale, which evaluated your credit risk and (potentially) extended you a revolving credit line equal to what the lender deemed was your appropriate borrowing capacity, potentially far in excess of your purchase amount. Affirm is just a "micro-transaction" take on that very large and lucrative market. They extend a fixed term, one-time line of cr…
FY Ended June 30, in millions | 2019 | 2020 ------------|--------|-------- net revenue | $264 | $509 op ex | $391 | $617 net loss | $(120) | $(113) loss ex SBC | $(79) | $(83) volume | $2,620 | $4,637 customers | 2.05 | 3.62
Am I right in reading 30% of their rev is coming from Peloton? (Control-F “Peloton”) “Our top merchant partner, Peloton, represented approximately 28% of our total revenue for the fiscal year ended June 30, 2020 and 30% of our total revenue for the three months ended September 30, 2020. Our top ten merchants in the aggregate represented approximately 35% of our total revenue for the fiscal year ended June 30, 2020 an…
Earlier quoted context omitted.
Am I right in reading 30% of their rev is coming from Peloton? (Control-F “Peloton”) “Our top merchant partner, Peloton, represented approximately 28% of our total revenue for the fiscal year ended June 30, 2020 and 30% of our total revenue for the three months ended September 30, 2020. Our top ten merchants in the aggregate represented approximately 35% of our total revenue for the fiscal year ended June 30, 2020 an…
Recently, I went to Peloton dealership to order one bike. They offered 39 months 0% APR. I asked if they can give me some sort of cash discount. Because of lack of cash discount, and availability of 0% APR naturally I financed it. Perhaps, that's how Affirm is getting their business.
affirm is one of those things that was pretty interesting. Coming from a country where micro-installments at PoS was standard, i always thought it was really interesting the US didn't have it. Good for them, I'll be buying shortly after their IPO.
Maybe not quite the same thing as in your country, but layaway used to be fairly common in the US: https://en.wikipedia.org/wiki/Layaway
The PoS thing i am talking about was even before ecommerce was common was mostly decentralized through the seller. Overtime, banks started getting into this niche, and when you were paying with credit card, they offered you installments usually at 0% apr for few months. Eventually this moved to e-commerce with websites offering similar payments.
I also sort of remember in the US some credit cards (probably chase?) offered installments after you pay for the item - you'd login into your account, and pick a purchase to pay over time.