Dive Brief:
- Buy now, pay later provider Affirm said in a company web post Thursday that it will divest its Returnly unit, a returns payment platform it acquired two years ago. The “sunsetting” of that platform will occur by early October, the company said.
- Affirm purchased Returnly for $300 million in June 2021. An Affirm spokesperson said the company did not sell Returnly and declined to comment on whether Affirm will be writing off the business. “The vast majority of Returnly employees have already been re-deployed to other departments within Affirm,” the Affirm spokesperson said, declining to identify the number of employees Returnly had.
- Alternatively, San Francisco-based Affirm is now increasing its work with another returns management company, entering a strategic partnership with Loop Returns, the BNPL provider said in the post.
Dive Insight:
Two years ago, Affirm said its acquisition of Returnly would enable Affirm customers to easily return goods purchased using the company’s BNPL financing, through self-service online returns.
Now, Affirm has “made the decision to divest our Returnly business and are also entering into a new strategic partnership with Loop Returns,” Affirm Chief Revenue Officer Wayne Pommen wrote in Thursday’s web post.
Loop, a returns partner for Canadian e-commerce company Shopify, will now be the “preferred returns provider” for merchants currently using Returnly, Pommen wrote. Affirm and Loop will work to transition Returnly merchants to the Loop platform by October. About 1,500 merchants use Returnly’s services, while Loop serves about 2,200 merchants, according to a Loop web post Thursday.
Shuttering Returnly and partnering with Loop will allow Affirm “to take an even deeper focus on driving strong growth and profitability in our core business,” among other pursuits, Pommen noted in Affirm’s post. Loop did not respond to a request for comment.
That focus on profitability has become more intense for BNPL providers such as Affirm as the U.S. economic environment has worsened on some fronts this year. Affirm executives have said the company aims to become profitable, on an adjusted operating income basis, by the end of the fiscal year ending June 30. Affirm reported a $205.7 million loss in its fiscal third quarter ending March 31.
Earlier this year, Affirm cut about 500 employees and exited Australia.
