In the latest example of an online lender striving to become part of consumers' daily lives, Affirm is acquiring the maker of a personal financial management app.
Affirm, a San Francisco company headed by former PayPal co-founder Max Levchin, said Wednesday that it is buying Sweep, an upstart that makes an iPhone app designed to help consumers manage their financial lives without setting a formal budget.
The deal was unveiled two weeks after Affirm announced that it raised $100 million in new equity. The purchase price was not disclosed.
In a press release Wednesday, Affirm said that its acquisition of Sweep marks a first step in its expansion beyond point-of-sale financing. Affirm, which was founded in 2012, has partnerships with retailers to offer their customers a way to finance e-commerce purchases.
Sweep's app allows consumers who link their bank accounts and credit cards to see their upcoming paychecks and payment obligations on a timeline.
"Consumers deserve honest, trustworthy services and guidance that empowers them to advance their financial well-being," Levchin said in the press release.
The deal bears a close resemblance to Prosper Marketplace's acquisition last year of the app maker BillGuard.
Prosper, one of the leading online consumer lenders, saw the acquisition of a personal finance app as a way to become part of the daily lives of its borrowers. The idea was that engaged customers are more likely to become repeat customers. In March, the newly acquired app was rebranded as Prosper Daily.
"I think this platform will allow for extreme innovation in the next few years," Itzik Cohen, Prosper's chief business officer, said in March.
Affirm has similar plans for Sweep. The current Sweep app will be discontinued in May, and a new version that combines technology from both companies is expected to launch later this year.
Affirm has been cagey about its expansion plans in the lending business. But the company clearly hopes that having a direct link to consumers, via an app, will provide a platform for selling loans.
"We're going to have that relationship, so that we're going to be able to get people interested," said Brad Selby, Affirm's vice president of growth and new markets.
Sweep is less established than BillGuard was in the competitive world of personal finance apps.
At the time BillGuard was purchased, it had more than 1.3 million registered users. Some of them paid $2.99 to $9.99 per month for premium services.
San Francisco-based Sweep launched its app in October 2015, and the firm does not currently generate revenue. Co-founder Jackson Gates declined to say how many people are using the app.
Four of Sweep's five employees, including its two co-founders, are joining Affirm.
Selby described the acquisition as one step along a path toward building Affirm into a next-generation financial services company. "I don't want to call it a bank, because it may not be a bank," he said.