The Affirm Holdings Inc. website home screen is shown on a laptop computer in a photo taken on Wednesday, December 9, 2020 in Little Falls, New Jersey, US.
Gabby Jones | Bloomberg Getty Images
Shares of the payments company increased their initial public offering on Nasdaq by more than 80%, saying the market was likely to have a busy season for debates.
The stock started trading at $ 90.90 per share. Affirm priced its shares at $ 49 appi, its target range was above $ 41 to $ 44, and tried to raise $ 1.2 billion.
Founded in 2013 by PayPal co-founder Max Levchin, Affirm has become a staple in the “buy now pay later” space that offers point-of-sale loans. The company allows customers to finance online purchases that can be paid back in monthly installments without compounding interest.
It works with about 6,500 retailers, including Peloton, Wayfair, Walmart, and direct-to-consumer eyeglasses company Warrior Parker. In an update to its IPO filing, Affirm said that it is used by more than 6.2 million people. Affirm also partnered with Shopify last year, allowing merchants to offer installment loans on the products they sell.
About $ 510 million in revenue for the fiscal year ended June 30, a jump of 93% from the previous year. In the three months ending September 30, revenue increased 98% year-over-year, while net losses fell by almost half to $ 15.3 million.
When they help a merchant make a sale, the money benefits. It earns interest income on loans purchased from bank partners and some consumer loans. The fees they charge vary in consumers’ credit, but often start at 0%.
“Our goal is to be a viable alternative to credit cards,” Levchin told CNBC ahead of the company’s first business.
Morgan Stanley, Goldman Sachs and Allen & Co. were the key underwriters for the offering. Major investors include Peter Thiel’s founding fund, Khosla Ventures and Lightspeed Venture Fund.
Affirm’s market debut could be another successful venture for Levinch, which owns 27.5 million shares in the online lender. Following the sale of PayPal to eBay in 2002, Levchin started social application company Slide. It sold in 2010 for $ 182 million reported to Google.
Affirm, which trades under the symbol “AFRM”, has made CNBC’s Disinter 50 list twice.
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