Confirm the home screen of the Holdings Inc. website. on a laptop in an arranged photo taken on Wednesday, December 9, 2020 in Little Falls, New Jersey, USA.
Gabby Jones | Bloomberg | Getty Images
Payment company Affirm’s share rose by more than 80% in its initial public offering on the Nasdaq, kicking off a likely busy season for market debuts.
The shares started trading at $ 90.90 per share. Affirm had priced its shares at $ 49 each, above its target range of $ 41 to $ 44 each, and is looking to raise $ 1.2 billion.
Founded in 2013 by PayPal co-founder Max Levchin, Affirm has become a prominent place in the buy now, pay later space offering point-of-sale loans. The company allows customers to fund online purchases that can be repaid in monthly installments without accruing compound interest.
It partners with approximately 6,500 retailers, including Peloton, Wayfair, Walmart and direct-to-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, allowing merchants to offer installment loans for products they sell.
Affirm brought in approximately $ 510 million in revenue for the fiscal year ended June 30, up 93% from last year, according to the documents. In the three months ended September 30, revenue grew 98% year over year, while net losses fell about half to $ 15.3 million.
Affirm makes money when they help a merchant sell. It also earns interest income on loans it purchases from banking partners and on some consumer loans. The rate they charge depends on the consumer’s credit rating, but often starts at 0%.
“Our goal is to be a viable alternative to credit cards,” Levchin told CNBC ahead of the company’s initial transaction.
Morgan Stanley, Goldman Sachs and Allen & Co were the lead insurers for the offering. Major investors include Peter Thiel’s Founders Fund, Khosla Ventures and Lightspeed Venture Funds.
Affirm’s market debut could be another successful venture for Levchin, who owns 27.5 million shares in the online lender. After selling PayPal to eBay in 2002, Levchin started the social application company Slide. That was sold to Google in 2010 for a reported $ 182 million.
Affirm, which trades under the symbol “AFRM”, has twice made it to CNBC’s Disruptor 50 list.
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