Affirm Holdings Inc. home page screen On a laptop computer in an uncluttered photo taken in Little Falls, New Jersey, USA, on Wednesday, December 9, 2020.
Gabe Jones | Bloomberg | Getty Images
Payments firm Affirm rose more than 103% on its initial public offering (IPO) on the Nasdaq exchange, kicking off what was likely a busy season with its market debut.
The stock started trading at $ 90.90 a share. Was confirming Pricing its shares At $ 49 a piece, higher than the target range of $ 41 to $ 44 each.
Founded in 2013 by co-founder PayPal Max LevchinAffirm has become prominent in “Buy Now Pay Later” space That offer point of sale loans. The company allows customers to finance online purchases that can be paid in monthly installments without accumulating compound interest.
It works with about 6,500 retailers, including Peloton, Wayfair, Walmart and the consumer direct-to-consumer eyeglasses company, Warby Parker. In an update to the IPO filing, Affirm said more than 6.2 million people are using it. Affirm also partnered with Shopify last year, allowing merchants to offer installment loans on the products they sell.
The company brought in nearly $ 510 million in revenue for the fiscal year ending June 30, up 93% from a year ago, according to its filings. In the three months ending September 30, revenue grew 98% year-over-year, while net losses nearly halved to $ 15.3 million.
Affirm makes money when it helps a merchant make a sale. It also earns interest income on loans it buys from bank partners and some consumer loans. The rate they charge varies depending on the creditworthiness of consumers, but it often starts at 0%.
“Our goal is to be a viable alternative to credit cards,” Levchin told CNBC ahead of the company’s debut.
Morgan Stanley, Goldman Sachs, Allen & Co. were the main guarantors of the show. Major investors include Peter Thiel’s Founders Fund, Khosla Ventures and Lightspeed Venture Funds.
Affirm’s market debut could represent another successful venture for Levchin, which has 27.5 million shares in the online lender. After PayPal was sold to eBay in 2002, Levchin started the social app company Slide. This Sold To Google in 2010 for $ 182 million.
Affirm, which trades under the symbol AFRM, has made CNBC’s Disruptor 50 list twice.