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Affirm, a fintech services company has recently announced its interests in acquiring Returnly, a returns payment platform for $300 million in cash and equity. Both companies are looking to close the deal by June this year, as per reports.
As returns continue to be a challenge for retailers, Returnly aims to expand its reach with Affirm as per the statements of Eduardo Vilar, CEO, and founder of Returnly. In recent years, Returnly had launched Green Returns, a returnless refund feature, to mitigate environmental impacts of the return processes, and had also raised $8 million in Series A funding led by Mundi ventures and The Venture City.
Known for providing eligible customers instant merchant credit when returns are initiated, Returnly at present serves over 1800 businesses, processing over $1 billion in returns. Over 8 million customers have used their platform, as per reports.
While Returnly has raised money, enhancing its offering, the buy now pay later platform Affirm has not lagged behind. Earlier, they had added Shopify and David Bridal’s to its roster of partners and also increased their customer base. They had also raised $1.2 billion in their IPO earlier this year, at $49 per share. In 2019, they had invested in Returnly as well. Reports state that this acquisition by Affirm is aimed at getting an edge over its competitors.
Affirm’s CFO Michael Linford commented that they were targeting the returns space for quite some time, substantiating their previous investment in Returnly. Stating that e-commerce transactions have been known to have higher return rates as compared to brick and mortar sales, he added,
“E-commerce merchants, it can sometimes be more difficult to convince customers over the internet to exchange items rather than receive a refund; whereas if a customer buys an item in a store and then has to go to return it in-store, the sales associate has a chance to sell the customer on something else, face-to-face,” Michael added.