North American platform Affirm announced on Wednesday that it has acquired return payment platform Returnly for approximately $300 million as return issues continue to plague retailers . The two companies are expected to complete the transaction by the end of June.
The company is acquiring Returnly, which provides instant merchant credit for eligible consumer-initiated returns , as U.S. consumers continue to initiate returns and exchanges as online orders surge, putting pressure on North American sellers .
Customers returned $428 billion worth of merchandise last year , according to the National Retail Federation .
Returnly currently provides return and exchange services for more than 1,800 companies and has processed more than $1 billion in return applications . It is reported that more than 8 million customers have used the platform .
Affirm was an early investor in Returnly, and two years later the company received $8 million in Series A funding. In the same year, the platform launched a non-refundable refund feature and opened an instant transaction service through Shopify Plus.
Returnly CEO and founder Eduardo Vilar said in a statement that the company wants to expand its partnership with Affirm given that returns remain challenging for retailers.
According to NRF research, online return rates doubled from 2019 to 2020, and the pandemic was a significant catalyst for the growth in online sales and returns .
In addition to the financial challenges for retailers, companies must also contend with the environmental impact of returns, which largely never make it back to shelves to be sold again because of the complex logistics of evaluating returns .
“We set out to use Returnly to fix the brokenness that returns had inflicted on our platform , ” Vilar said in a statement .
As Returnly raises money and beefs up its product offering, so too does Affirm, which added Shopify and David's Bridal to its roster of partners last year as the company continues to grow its customer base and launch a buy now, pay later feature to fuel its sales growth.
Affirm also raised $1.2 billion in its initial public offering earlier this year , with an initial price of $49 per share, above the expected range of $41 to $44 per share .
“In 2019, Affirm invested in Returnly because we recognized their technology’s ability to help merchants remove friction from returns, increase loyalty, and retain more customers,” said Affirm CEO Steve Jobs. “ Showing sellers that they have returned an item before it’s actually returned is now a de facto requirement in highly competitive categories like fashion and lifestyle . ”
After the completion of this acquisition, Affirm 's valuation will increase significantly, and it will have more competitiveness in the North American platform competition. Returns Affirm Acquisition |
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