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Online lender Affirm Holdings Inc. (NASDAQ:AFRM) has raised roughly $1.2 billion by pricing its initial public offering (IPO) at $49 per share, above the expected range of $41 to $44, the company announced Tuesday.
What Happened: Affirm is a fintech company providing installment loans to online shoppers and is led by PayPal Holdings Inc (NASDAQ: PYPL) co-founder Max Levchin.
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The IPO values Affirm at $11.9 billion based on outstanding shares. Its fully diluted valuation, including options and restricted stock units, is about $15 billion, as per Bloomberg.
The company is set to begin trading on the Nasdaq under the symbol “AFRM” on Wednesday.
Affirm is one of the first in a list of several companies to go public this year. Affirm’s IPO shows that the market is hot for tech companies, continuing from 2020, which saw businesses raise more than $159 billion.
Affirm was founded in 2012 by Max Levchin. The PayPal co-founder is the second-biggest shareholder in Affirm, according to filings.
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Why It Matters: Affirm is popular among online merchants, with more than 6,500 using the platform according to the company’s prospectus.
Affirm offers a “buy now, pay later” product that appeals to online shoppers for buying big-ticket items and spread out payments. In return, Affirm charges merchants a fee, the Financial Times reports.
Affirm makes most of its money from merchant fees, which results in customers paying zero interest. It also offers interest-based loans without late fees.
A chunk of Affirm’s business comes from sales through fitness company Peloton Interactive Inc (NASDAQ:PTON), accounting for 28% of its 12-month revenue through June 2020.
Affirm clocked a revenue of $510 million for 12 months through June 2020 and reported losses of $113 million.
A boom in online shopping has led to the popularity of Affirm. However, it’s a competitive space with established players like PayPal offering similar buy now, pay later options.
Related News: 10 Of 2020's Top Performing IPOs
Crypto Whales Are Loading Up — Are You?
New research shows the biggest crypto buyers are back. And this time? They could hold for the possibility that Bitcoin will surpass $100,000 in 2024. You don’t want to miss the next massive crypto bull run like we saw in 2020 and 2021. To know exactly what’s going on and what to buy… Get Access To Benzinga’s Best Crypto Research and Investments For Only $1.