Home screen of Affirm Holdings Inc. on a laptop computer in an arranged photo taken in Little Falls, New Jersey, USA, on Wednesday, December 9, 2020.
Gabby Jones | Bloomberg | Getty Images
Payment company Affirm has grown by more than 80% in its initial public offering on the Nasdaq, launching what is likely to be a busy season for market debuts.
The stock began trading at $ 90.90 per share. Affirm has priced its shares at $ 49 a piece, over the target range of $ 41 to $ 44 each, and is trying to raise $ 1.2 billion.
Founded in 2013 by PayPal co-founder Max Levchin, Affirm has become an important place in the “buy now pay later” space, which offers point-of-sale loans. The company allows customers to finance online purchases that can be repaid in monthly installments without accruing compound interest.
It operates with approximately 6,500 retailers, including Peloton, Wayfair, Walmart and the direct consumer glasses company Warby Parker. In an IPO filing update, 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 for the products they sell.
The statement brought in revenue of about $ 510 million for the June 30 fiscal year, up 93 percent from last year, according to its records. In the three months ended September 30, revenues rose 98 percent year-over-year, while net losses fell by about half to $ 15.3 million.
Affirm makes money when it helps a trader make a sale. It also earns interest income from loans it buys from bank partners and some 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 transaction.
Morgan Stanley, Goldman Sachs and Allen & Co were the main subscribers to the offer. Major investors include the Peter Thiel Founders Fund, Khosla Ventures and Lightspeed Venture Funds.
Affirm’s market debut could mark another successful deal for Levchin, which owns 27.5 million shares in the online lender. After selling PayPal to eBay in 2002, Levchin started the social application company Slide. This sold to Google in 2010 for the reported $ 182 million.
Affirm, which trades under the symbol “AFRM”, made the CNBC Disruptor 50 list twice.
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