AFRM begins buying and selling on Nasdaq

Affirm Holdings Inc. website home screen on a laptop in an arranged photo taken in Little Falls, New Jersey, the United States, on Wednesday, December 9, 2020.

Gabby Jones | Bloomberg | Getty Images

Payment firm Affirm’s shares rose more than 103% when it went public on Nasdaq, ushering in what is expected to be a busy season for market debuts.

The stock traded at a price of $ 90.90 per share. Affirm had valued its shares at $ 49 apiece, which was above the target range of $ 41-44 each.

Affirm was founded in 2013 by PayPal co-founder Max Levchin and has made a name for itself in the “Buy now, pay later” area, offering POS loans. The company enables customers to finance online purchases that can be paid back in monthly installments without incurring compound interest.

The company works with around 6,500 retailers, including Peloton, Wayfair, Walmart and the eyewear company Warby Parker. In an update on its IPO filing, Affirm said it is used by more than 6.2 million people. Affirm also partnered with Shopify last year so that merchants can offer installment loans on products they sell.

Affirm had sales of approximately $ 510 million for the fiscal year ended June 30, an increase of 93% over the previous year. For the three months ended September 30, revenue increased 98% year over year, while net losses decreased approximately half 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 banking partners and some consumer loans. The interest rate varies based 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 primary insurers for the offering. The main investors include the Peter Thiel start-up fund, Khosla Ventures and Lightspeed Venture Funds.

Affirm’s market debut could mark another successful endeavor for Levchin, who owns 27.5 million shares in the online lender. After selling PayPal to eBay in 2002, Levchin started the social applications company Slide. That was sold to Google for $ 182 million in 2010.

Affirm, trading under the symbol AFRM, has created CNBC’s Disruptor 50 list twice.

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