Home screen of the Affirm Holdings Inc. website on a laptop in a concerted photograph taken in Little Falls, New Jersey, USA, on Wednesday, December 9, 2020.
Gabby Jones | Bloomberg | Getty Images
The payment company Affirm Shares increased more than 80% in its initial public offering on the Nasdaq, and started what is likely to be a very busy season for market debuts.
The shares began trading at $ 90.90 per share. Affirm had its share price at $ 49 per piece, above its target range of $ 41 to $ 44 each, and seeks to raise $ 1.2 trillion.
Founded in 2013 by PayPal co-founder Max Levchin, Affirm has become a standout in the “buy now pay after” space that offers point-of-sale loans. The company allows customers to finance online purchases that can be returned in monthly installments without accruing interest.
It operates with around 6,500 retailers, including Peloton, Wayfair, Walmart and direct consumer eyewear company Warby Parker. In an update to its IPO filing, Affirm said it is used by more than 6.2 million people. Affirm also partnered with Shopify last year, which allowed retailers to offer term loans on the products they sell.
The statement raised approximately $ 510 million in revenue for the year ended June 30, a 93% jump from last year, according to its statements. In the three months ending Sept. 30, revenue grew 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. He also earns interest income from the loans he 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 trade.
Morgan Stanley, Goldman Sachs and Allen & Co. were the main subscribers to the offer. Major investors include the Peter Thiel Fund founders, Khosla Ventures and Lightspeed Venture Funds.
Affirm’s market debut could mark another successful venture for Levchin, which owns 27.5 million shares of the online lender. After the sale of PayPal on eBay in 2002, Levchin started the social app company Slide. This was sold to Google in 2010 for $ 182 million.
Affirm, which is listed under the symbol “AFRM”, has converted CNBC’s Disruptor 50 list twice.
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