PayPal cofounder and serial entrepreneur Max Levchin told The Wall Street Journal that he’s decided to take the reigns as the new CEO of Affirm, the finance startup launched out of his technology incubator last year.
Affirm partners with e-commerce companies to let customers get instant lines of credit for purchasing items on their sites. The startup calculates the risk and sets the rate and structure for borrowers based on info from their social media accounts and the cost of the items they want to purchase, instead of from their FICO credit scores. Levchin has likened the idea of flexible loans based on relationships and trust instead of traditional credit scores to putting a purchase on a digital tab. Consumers will be able to buy a product “now” but pay later, and pay interest on the credit line, until the purchase is paid off.
The company has raised $US45 million in the last year from the likes of Khosla and Lightspeed Ventures, and has 32 employees total, including Nathan Gettings, the cofounder of the big-data startup Palantir. Levchin hopes to grow that number to 50 by the end of the year.
Levchin, whose incubator HVF has also launched the pregnancy startup Glow, says that he decided to make Affirm his full-time gig after he realised how much traction it was getting in early testing. He hopes to raise more money by the end of the year so that Affirm can start offering different kinds of loans, including ones to small businesses.
“Small business lending to me is kind of the holy grail,” he told The Wall Street Journal.
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