Affirm is building a 'modern answer' to AmEx, CEO explains

Affirm (AFRM) CEO Max Levchin met with Yahoo Finance Executive Editor Brian Sozzi at the Goldman Sachs Communacopia and Technology Conference to discuss the fintech business's evolution and where it could be headed next.

Levchin highlights the company’s strength, nodding to its recent quarterly earnings. He said the company is “moving from startup mode to growth mode” to its next phase as a financial services company. Affirm CFO Michael Linford described the payment service to be "firing on all cylinders" in an interview with Yahoo Finance in August.

“We think of ourselves as a forever company,” the CEO says, adding that “for a long time as a startup, you say that, but you mean let's survive another week." Now, Levchin's outlook on Affirms has extended by decades.

Levchin notes the initial framing of the company as a buy now, pay later (BNPL) platform was a mistake: “One thing that I wish I could rewind the clock on is not to use those four dreaded letters.”

“We're much more than BNPL,” the CEO tells Sozzi, saying the company is “payments first and foremost” as a financial services business with a “deep relationship with consumers.”

Looking forward, Levchin says Affirm aspires to “build a modern answer” to American Express, (AXP) a company the CEO admittedly admires greatly. “It's a wonderful brand” and “a great service,” but it is “a club and a club with a velvet rope, and you've got to be good enough to be on the right side of the rope.”

“I wanted to build a payment system, a payment network, reach merchants, serve consumers, offer access to credit. But for everyone, for anyone who wants to be a part of something that stands for no late fees, no deferred interest, real transparency, [and with a] real pro-consumer attitude," Levchin explains.

“Now, the next few steps are just [getting] bigger,” with more services, consumers, and merchants, Levchin tells Yahoo Finance.

Catch more Yahoo Finance coverage and interviews from the Goldman Sachs Communacopia and Technology Conference.

For more expert insight and the latest market action, click here to watch this full episode of Catalysts.

This post was written by Naomi Buchanan.

Video Transcript

Earlier this week of the 2024 Goldman Sachs Community, a CIA technology conference.

Yah, finances Brian.

So he sat down with a firm CEO and talked about the company's plans for growth in the year ahead.

Take a listen, finance is continuing its coverage at the Goldman Sachs Comuna conference in San Francisco, talking all things tech media.

But let's stay focused on tech right now.

Bring in a firm founder and Co Max Le and Max.

Good to see you again.

It's been another year in the books.

I think I just saw you here, but nonetheless, we're here again.

What is the state of your business?

It is great.

We just reported our final quarter of fiscal 24 we killed it.

We grew north of 30% on GMV, north of 45% on revenue for both the quarter and the year.

And we uh made a public commitment to get gap profitable in fiscal 25.

So, firing at all Pistons just growing and, and making money, I've been talking to you, I think is pretty much the founding of the company, but it feels like the past two quarters, something has clicked in the business and has entered a new gear.

Are you entering a different chapter?

You know, not to be overly self critical strategies remain the same.

The mission has remained the same, the core valleys will remain the same.

The executive team has largely remained the same.

I think what I figured out is how to talk about our business to finally investors and others can understand what we're up to.

But we've always done exactly what we said we would and it's always worked for us.

Do you still see yourself as bnpo?

No.

The one thing that I wish I could rewind the clock on is to not use those four dreaded letters in RS one.

We're much more than B NPL.

We are payments first and foremost, we're financial services.

We have this deep relationship with consumers.

We serve 300,000 merchants that are actively transacting with us.

There's a lot to us than just B NPL in the moment.

It seemed like a cool acronym to get behind it is now one of many things we do.

That's interesting because I talked to Robin Hood co-founder, Vlad Tenev and he, his company's gone through a metamorphosis too as well, focusing more on wealth management, uh training, of course.

But I mean, is your company, is it fair to say it's just matured?

But in a good way, obviously, you're still growing, but there's something else going on here besides from looking back to when you started the company.

We're definitely moving from start up mode to growth mode for lack of a better term for a while.

I think we took growth for granted and we're just trying to keep all the balls in the air and build systems and processes to ensure we can deliver on a promise.

We represented at this point, we know how to plan, we know how to keep our eyes on the current quarter or the current day, but also make real plans to win in our market.

Five years out, 10 years out, 30 years out.

So we think of ourselves as a forever company.

And I think for a long time as a start up, you say that, but you mean let's survive another week at this point, it's very real where we're thinking, what will this thing look like 20 years from now?

And I hope I'm here to run it then.

But uh well, you will be, well, what is it?

What does it look like?

20 years from now?

You know, from the very beginning, we said we're trying to build a modern answer to American Express.

I admire American Express greatly.

I think it's a wonderful brand.

It's a great service to its consumers, but it is a club, a club with a velvet rope and you got to be good enough to be on the right side of the rope.

I wanted to build a payment system, a payment network, reach merchants serve consumers offer access to credit.

But for everyone, for anyone who wants to be a part of something that stands for no late fees, no deferred interest, real transparency, real pro consumer attitude, helping people get the things they want without having to get into debt that they can't repay.

And that, that's what we are today.

That's where we got to.

So this is the state of a firm.

Now, the next few steps are just get bigger, just get more services, more consumers, more merchants, et cetera.

What makes you so passionate about what you do?

I'm generally a passionate guy.

Just talked about cycling.

I can talk your head off on that topic too.

Um I love financial services.

It's the largest market I think in the world, everyone eventually has to buy something or sometimes sell something.

It's the market that if left to its own devices, devolves into all sorts of gotchas and gimmicks and squirrelly behaviors.

And no one ever talks about how much they love their bank.

No one ever talks about how much they think their credit card is on their side.

They, they sometimes talk about points but they never say this is, this is the real deal.