We are shareholders in Square, the company that develops tools for merchants to transact and run their business. In August, Square announced to buy Afterpay, a leader in the Buy Now Pay Later industry, for USD 29 billion in stock and cash.

Afterpay has 17 million active clients that seek a better way to pay. The opportunity among younger people is immense as they demand transparent and efficient payment solutions. Afterpay charges no late fees and instead the account is paused when installments are due. To not ask questions at the start of a client relationship and instead rewarding good behavior has become a mission at many fintech companies. They are using data to develop their own risk models to be as inclusive as possible.

Brands are becoming more aware of the opportunity; offering BNPL solutions leads to significantly higher conversion. AfterPay has partnered more than 100k merchants and just reported 175% revenue growth in U.S.

The Guardian Fund also owns a stake in Affirm. On August 27th, it announced a partnership with Amazon to deliver flexible payment solutions to Amazon clients at checkout. Affirm’s share price is up significantly today and we will see how the new price is reflecting the increased intrinsic value. The opportunity for Affirm to grow to hundreds of billions of GMV is significant and both Afterpay and Affirm are riding a huge wave. It would not surprise us if a bigger company would acquire Affirm.

The businesses in which we like to invest are offering radically better choice and not just incremental marginal benefits. This combined with enormous scale and optionality coming from adding additional services and growing the market gives almost unbounded upside. In the field of commerce, this has led to interesting investments and we are excited about the opportunities we are seeing today.