Affirm’s foray into the product return management space through this acquisition gives it a competitive edge. Here are the top-line bullets you need to know.
Buy now, pay later (BNPL) fintech specialist Affirm has acquired Returnly, a software provider that helps to manage returns for the retailers, for $300M in a cash-and-stock deal.
WHO ARE THE PARTIES TO THE DEAL?
- Returnly: California-based Returnly provides store credits to customers upon initiating a return. The platform has served over 1,800 businesses and has processed more than $1B in returns to date. More than 8M customers have used its platform.
- Affirm: San Francisco-based fintech company Affirm offers installment loans to consumers for point-of-sale purchases. Affirm reported a revenue of $510M for the fiscal year ending June 2020 and a net loss of $113M. The company reported 4.5M active customers as of December 2020, a 52% year-over-year increase. In January 2021, Affirm went public on the Nasdaq with a valuation of $12B.
WHY DOES THE MARKET MATTER?
The acquisition strengthens Affirm’s position in the returns management space where:
- The pandemic has led to a boost in e-commerce as businesses shift online. Total online returns accounted for 18%, or $102B, out of $565B in US online sales in 2020, per the National Retail Foundation and Appriss Retail.
- The National Retail Foundation states that online returns have doubled between 2019 and 2020. The increase of returns provides an opportunity for online retailers to engage shoppers and manage customer experiences, building retention and providing reselling opportunities.