BNPL – US Affirm successful listing

Nasdaq listing gives Affirm US$23 billion valuation

The BNPL app has 6.5 million customers, revenues US$509 million and losses of US$125 million

San Francisco based Affirm successfully listed overnight on the Nasdaq – the initial price of US$49 was well above the strike price of US$34-38

Affirm CEO Max Levchin, a PayPal founder is the largest stock holder with 27.5 million shares. He describes Affirm as “giving people without credit history or savings accounts access to small loans” That used to be called subprime lending, in 2021 it’s "We empower consumers to pay over time rather than paying for a product entirely upfront,"

A Business Insider report, Affirm's interest rates reach as high as 30%, though around 40% of its customers pay no interest.

Plenty of comparisons will be made with BNPL stock listed in Australia – 8 stocks have a combined market cap of US$27.5 billion.

Affirm IPO Stock Soars As Trading Begins, Raising $1.2 Billion

BRIAN DEAGON

Affirm Holdings raised $1.2 billion with an initial public offering that priced well above expectations and gave it a valuation of about $23 billion. The Affirm IPO jumped by double digits on its first day of trading Wednesday.01:48

 The company offered 24.6 million shares at $49, well above its estimated price range of $41 to $44. It initially planned to price shares at $33 to $38.

Affirm stock closed at 97.24, up 98.5% on the stock market today.

Based in San Francisco, Affirm is building what it calls a next-generation platform for digital and mobile e-commerce, providing loans for online shoppers. It was founded in 2012 by Max Levchin, who also co-founded PayPal (PYPL). Levchin is the company's single biggest shareholder.

Investors include Founders Fund, a venture capital firm formed by former PayPal co-founder Peter Thiel. Other investors include Khosla Ventures.

Affirm says its mission is to give people without credit history or savings accounts access to small loans. It allows consumers to pay for purchases in fixed amounts without deferred interest, hidden fees, or penalties, according to the Affirm IPO filing. Shoppers can choose a schedule for paying back the loans with varying interest rates.

"We empower consumers to pay over time rather than paying for a product entirely upfront," it said. Affirm also provides merchants with a platform "to more efficiently promote and sell their products, optimize their customer acquisition strategies, and drive incremental sales."

Strong Interest In Affirm IPO

According to IPO research and advisory firm IPO Boutique, the Affirm IPO was "multiple-times oversubscribed, with very strong momentum from the roadshow," suggesting strong interest by institutional investors.

As of Sept. 30, Affirm said, "more than 6.2 million consumers have completed approximately 17.3 million transactions with over 6,500 merchants on our platform. That led to a total gross merchandise volume, net of refunds, of approximately $10.7 billion transacted through its platform since July 1, 2016."

In the third quarter, Affirm reported revenue of $174 million, up 98% from the year ago period. In addition, it reported a net loss of $15.3 million vs. a loss of $30.8 million in the year-ago quarter.

The Affirm IPO will list on the Nasdaq under the ticker AFRM. The lead underwriters are Morgan Stanley and Goldman Sachs.