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Affirm Holdings Inc. website home screen on a laptop in a curated photograph taken in Little Falls, New Jersey, USA, Wednesday, December 9, 2020.
Gabby Jones | Bloomberg | Getty Images
Shares of payments firm Affirm climbed more than 80% when it went public on the Nasdaq, triggering what should be a busy season for the market debut.
The stock started trading at $ 90.90 per share. Affirm had valued its shares at $ 49 each, above its target range of $ 41 to $ 44 each, and is seeking to raise $ 1.2 billion.
Founded in 2013 by PayPal co-founder Max Levchin, Affirm has grown into a prominent player in the “buy now, pay later” space that offers point-of-sale loans. The company allows customers to fund online purchases that can be paid off in monthly installments without accumulating compound interest.
He works with around 6,500 retailers, including Peloton, Wayfair, Walmart, and direct-to-consumer eyewear company Warby Parker. In an update to its filing, Affirm said 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.
Affirm generated approximately $ 510 million in revenue for the fiscal year ended June 30, a 93% jump from a year ago, according to its filings. In the three months ending September 30, revenue increased 98% year-over-year, while net losses fell by about half to $ 15.3 million .
Affirm earns money by helping a merchant make a sale. It also receives interest income on loans it purchases from banking partners and on certain consumer loans. The rate they charge varies depending on the creditworthiness of consumers, but often starts at 0%.
“Our goal is to be a viable alternative to credit cards,” Levchin told CNBC before the company’s first exchange.
Morgan Stanley, Goldman Sachs and Allen & Co were the main underwriters of the offer. The main investors are the Founders Fund of Peter Thiel, Khosla Ventures and Lightspeed Venture Funds.
Affirm’s market debut could mark another successful venture for Levchin, who owns 27.5 million shares of the online lender. Following the sale of PayPal to eBay in 2002, Levchin started the social apps company Slide. This was sold to Google in 2010 for $ 182 million.
Affirm, which trades under the symbol “AFRM”, has twice made CNBC’s 50 disruptor list.
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