Affirm’s Max Levchin Just Called the Fintech Bubble

Affirm, the small business lending startup headed by Max Levchin, has raised $320 million to date.

Apparently, even Levchin, a PayPal founder, views that as, well, a lot.

Yesterday, in a wide-ranging interview with Inc. magazine, Levchin called out fintech for being “oversaturated” and “overinvested.” In other words, we’ve got a bubble, people.

My general view of the world is that raising money for series B will be harder in 2016 than it was in 2015 in fintech. There’s a perception of oversaturation or at least significant overinvestment in too many small bets being taken by venture capital.

Levchin said there will be blood in fintech in the form of M&A of startups. Levchin told Inc. that Affirm, launched in 2012, “is starting to get approached by startups offering to sell themselves.”

It’s still very few and far between right now, but I expect it will increase significantly. My guess is that you will see a lot of M&A and failure activity.

Affirm already made an acquisition in 2015 — it purchased LendLayer, a startup offering student loans for coding bootcamps, last August, shortly after it closed a Series B funding round of $35 million that included an investment from Andreessen Horowitz. Pricing details were not disclosed.