Affirm Holdings Inc. ‘s home screen on a laptop on a regular photo taken in Little Falls, New Jersey, USA, on Wednesday, December 9, 2020.
Gabby Jones | Bloomberg | Getty Images
The payment shares Affirm rose by more than 80% with its initial public offering on the Nasdaq, starting a busy season for market debuts.
The stock started trading at $ 90.90 per share. Affirm has priced its shares at $ 49 apiece, above its target range of $ 41 to $ 44 each, and aims to raise $ 1.2 billion.
Affirm, founded in 2013 by PayPal co-founder Max Levchin, has become a prominent figure in the “buy now pay later” space that offers point-of-sale loans. The company enables customers to finance online purchases that can be repaid monthly without incurring compound interest.
It works with about 6,500 retailers, including Peloton, Wayfair, Walmart and eyewear company Warby Parker. In an update of its IPO submission, Affirm said it is used by more than 6.2 million people. Affirm also partnered with Shopify last year, allowing retailers to offer installment loans on products they sell.
Affirm raised approximately $ 510 million in revenue for the fiscal year ended June 30, according to its filing, a jump of 93% from last year. In the three months ended September 30, year-on-year revenue grew 98%, while net losses fell by about half to $ 15.3 million.
Confirmation earns money if they help a trader make a sale. It also earns interest income on loans it buys from bank partners and some consumer loans. The rate they charge depends on the creditworthiness of the consumers but often starts at 0%.
“Our goal is to be a viable alternative to credit cards,” Levchin told CNBC before the first trade.
Morgan Stanley, Goldman Sachs and Allen & Co were the main underwriters for the offer. Major investors include Peter Thiel’s Founders Fund, Khosla Ventures and Lightspeed Venture Funds.
With Affirm’s debut on the market, Levchin, which owns 27.5 million shares in the online lender, could be another successful venture. After PayPal’s sale to eBay in 2002, Levchin started the social application company Slide. It was sold to Google in 2010 for $ 182 million.
Affirm, which trades under the symbol “AFRM”, twice made the CNBC’s Disruptor 50 list.
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