U.S. start-ups have launched a wave of listings, with homebuyer Door Dash and Airbnb, the home rental network, filing for ipos last week.
Affirm, a mobile payments company founded by PayPal co-founder Max Levchin, nearly doubled its annual revenue last year.
Affirm, founded by Max Levchin, a co-founder and former CTO of PayPal, has filed with the Securities and Exchange Commission (SEC) for its first public offering.
Affirm plans to issue two types of stock, an increasingly common practice among Silicon Valley start-ups, called “A” and “B”.
Affirm Payment, founded in 2012 and headquartered in San Francisco, is a financial services company specializing in “Affirm payments.” Affirm’s goal is to revolutionize banking by giving consumers more autonomy over their purchases and the ease with which they can enjoy financial services.
Affirm offers buyers a small alternative to traditional credit cards with loans for 3-36 months up to 17,500 US dollars. Instead of paying with compound interest and potential costs, Affirm shows its customers in advance exactly how much they will pay each month, without hidden fees or other extras.
On the surface, it looks like Affirm will become a direct competitor to mobile payment
companies like Square and Stripe, but the company is actually targeting another part
of the payment value chain to improve the conversion rate of mobile payments.
The company is one of the hottest startups in the field. Earlier this year, the company teamed up with Shopify, an e-commerce software provider that lets consumers buy goods in installments.
Affirm’s partners include brands such as Wal-Mart, Huawei, Warby Parker, Verizon Visible, David Yurman and Room and Board.
Affirm has also launched a savings service where customers can make a checking deposit through a savings account. Affirm will pay its customers interest at an annualized rate of 1.3 percent.
Affirm’s sales last year (end of June) reached USD 510 million, almost doubling annual growth. Annual losses decreased from USD 120 million to USD 110 million over the same period.
Affirm has so far funded about ‘1.5 billion, most recently in September 2020, when it received an undisclosed valuation of USD 500 million in G-Round financing led by Durable and GIC. In July 2020, the Wall Street Journal reported Affirm’s IPO plans and estimated that the company would be valued at between $5 billion and $10 billion.
Affirm said gross merchandise Volume (GMV), a key measure for the payments industry, was also up 77 percent from a year earlier, with more than 6.5 million consumers using the Affirm service. This year, about 64 percent of Affirm’s instalment loans have been used by repeat customers.
Affirm expects to raise USD 10 million on the day of the IPO, but the actual amount may change. The IPO will be written off by Morgan Stanley, Goldman Sachs, Allen and Co. and six other institutions. Goldman Sachs, Morgan Stanley and Barclays are the underwriters of the IPO.
Not only did Max Levchin create a legend, but some of the partners who co-founded PayPal broke away from the company and started their own businesses, all of which were so successful that they became known as the PayPal Mafia.