Affirm’s Max Levchin: ‘Let’s Not Make Money When It’s Bad For Customers’

While many banks and credit card companies make money through late fees and other penalties, consumer lending startup Affirm is taking a different approach. The company targets customers with limited access to credit and earns revenues when customers pay back their loans.

“Let’s build an institution … that doesn’t benefit off of its customers screwing up,” said Max Levchin, CEO and co-founder of Affirm, speaking to Andy Serwer of Yahoo Finance, at the CB Insights’ Future of Fintech Conference.

Levchin says the startup now hosts millions of customers, predominantly in the middle of the US and partners with over 1,500 retailers. It last raised a $200M Series E in Q4’17 at a valuation greater than $1.7B.

The company has tailored itself to underserved consumers such as young adults or immigrants who have typically had trouble accessing traditional credit.

“Our cornerstone is to offer sound financial advice … if a customer should not be borrowing money, we [Affirm] will not lend to them,” says Levchin.

As Affirm seeks to cater to the underserved, it may be finding traction.

Levchin touted the company’s Net Promoter Score as the most important metric he pays attention to. The score rates a company from 1-100 based on how likely customers are to recommend them.

“If you look at the net promoter score for a credit card issuing bank, if it’s greater than zero you’re doing something right … Ours is 83. The only one I know that’s higher is Tesla and that’s a religious cult.”