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Affirm to sunset returns platform it acquired for $300 million

Affirm to sunset Returnly, the returns platform it acquired for $300 million, Nubank partners with Amazon, and SoFi Invest gets a new look

July 10, 2023

Hi!

Hope you had a fantastic weekend! Everything seemed possible at the height of the 2020 - 2021 bull market. Shopify was building warehouses, Block and PayPal spent billions to enter the Buy Now Pay Later market, and Goldman Sachs was threatening to disrupt consumer banking.

Affirm acquired a returns platform Returnly for $300 million in 2021 to strengthen its offering to merchants. Last week, Affirm announced the plans to shutter the service (and I’d expect to eventually write off the investment). More on this and other cool stuff happening in the world of Fintech:

  • Affirm to sunset Returnly,

  • Nubank partners with Amazon, and

  • SoFi Invest gets a new look

Thank you for reading and have a great day!

Jevgenijs

p.s. have feedback on my newsletter? DM me on Twitter

Affirm to Sunset Returnly

The Buy Now Pay Later lender Affirm (NASDAQ: AFRM) announced the decision to sunset Returnly, a returns platform it acquired just two years ago for $300 million. Instead, Affirm is entering into a strategic partnership with Loop Returns, a “market-leading returns management” company, to provide returns services to its merchants. Affirm “will work hand-in-hand with Loop to ensure all Returnly merchants have a smooth and efficient transition, prior to sunsetting the platform by early October”. Loop Returns is Shopify’s returns partner.

The move allows Affirm to “take an even deeper focus on driving strong growth and profitability in our core business”. The company has been trying to contain mounting losses amid challenging conditions in the financial markets and economic uncertainty. In its third fiscal quarter (quarter ending March 2023), the company reported an Operating loss of $310 million on total revenue of $381 million. In the letter to shareholders, Affirm’s management reiterated plans to achieve “profitability on an adjusted operating income basis" as the company exits fiscal 2023.

Earlier this year, the company laid off 19% of its workforce and exited the Australian market. On the positive side, Affirm has expanded its partnerships with Stripe and Amazon, as well as sealed a cooperation deal with FIS’s Worldpay. The company is also working on the rollout of “Debit+”, a payment card that allows consumers to access Affirm credit. “Over 80% of all retail spend occurs at physical retail, but less than 5% of Affirm’s volume is offline,” commented Max Levchin on the ambition behind the launch of “Debit+” product in the company’s shareholder letter.

Nubank Partners with Amazon

The Brazilian digital bank Nubank (NYSE: NU) partnered with Amazon Brazil to offer exclusive benefits to its customers. Through Nubank's Shopping platform, Nubank clients will receive 2% cashback on all purchases made on the Amazon Brazil website and will get exclusive benefits during the upcoming Amazon Prime Day event. With access to over 150 merchants, Nubank Shopping allows customers to shop directly through Nubank’s mobile banking application and enjoy the benefit of earning cashback on all their purchases.

Image source: Nubank

Earlier this year, Nubank partnered with Uber to offer customers the convenience of paying for Uber trips using NuPay, Nubank's online payment method. By linking their NuPay account to the Uber app, customers can make quick and secure payments with just one click. Paying with NuPay also offers exclusive benefits, such as the possibility of receiving an additional credit limit for the transaction. In addition, customers no longer need to share their credit or debit card details for Uber payments, as the process is automated for a seamless experience.

SoFi Invest Gets a New Look

SoFi (NASDAQ: SOFI) announced the upcoming redesign of its brokerage service, SoFi Invest. The service, which allows SoFi members to trade stocks and ETFs (as well as offered access to IPOs, when those were a thing) was launched in 2019, and since then was used by more than 2.2 million SoFi clients. In the next few weeks, SoFi will release “a bevy of design updates” that will simplify the process of investing, reviewing portfolios, and accessing educational resources. These updates aim to make managing investments more user-friendly and intuitive than ever before.

Image source: SoFi

Barron’s dropped SoFi from this year’s “Best Online Brokers Survey” because “its investment site was, at best, an afterthought to its core lending banking business”. Barron’s survey aims to assess online brokers based on their ability to provide a comprehensive range of services, technological advancements, educational resources, and user-friendly platforms to meet the needs of self-directed investors. In 2023, Interactive Brokers and Fidelity tied for first place among the 10 brokerages evaluated. Charles Schwab took third place, followed by Morgan Stanley's E*Trade.

Despite facing a lawsuit from the Securities and Exchange Commission over allegedly operating an unregistered exchange, Coinbase (NASDAQ: COIN) shares have been on a rally, advancing 122% this year! Moreover, the stock is outperforming both Bitcoin and Ethereum, which are up 83% and 55% YTD respectively, but…

…just look at the performance of Bitcoin miners!!! 👇🏻

Cover image source: Max Levchin on LinkedIn

Disclaimer: Information contained in this newsletter is intended for educational and informational purposes only and should not be considered financial advice. You should do your own research or seek professional advice before making any investment decisions.