GIC-backed lender Affirm prices IPO above range to raise $1.59 billion

Affirm was founded in 2012 by Mr Max Levchin, who also co-founded PayPal Holdings. PHOTO: BLOOMBERG

NEW YORK (BLOOMBERG) - Affirm Holdings, which provides instalment loans to online shoppers, has priced its US initial public offering (IPO) above its marketed range to raise US$1.2 billion (S$1.59 billion).

In the first major US technology listing this year, Affirm sold 24.6 million shares for US$49 each, according to data compiled by Bloomberg that confirms an earlier report by Bloomberg.

The San Francisco-based company had marketed the shares for US$41 to US$44 apiece, a range that it had raised on Monday (Jan 11) from US$33 to US$38.

The IPO gives Affirm a market value of US$11.9 billion based on the outstanding shares listed in its filings with the United States Securities and Exchange Commission. The company's fully diluted valuation, including options and restricted stock units, is about US$15 billion.

Affirm is the first of several companies set to go public this week after a hot year for IPOs in 2020 led by Airbnb and DoorDash. Online marketplace for second-hand luxury goods Poshmark, pet supply retailer Petco Animal Supplies, mobile game developer Playtika Holdings and auto service and supply company Driven Brands Holdings are all on deck for IPOs.

Affirm was founded in 2012 by Mr Max Levchin, who also co-founded PayPal Holdings. Mr Levchin is the company's single biggest shareholder, according to filings. Other large owners include Jasmine Ventures, a fund affiliated with Singapore's sovereign wealth fund GIC, along with Khosla Ventures, Founders Fund, Lightspeed Venture Partners and Shopify.

More than 6,500 merchants use Affirm's platform, according to its prospectus.

For the third quarter, Affirm had a net loss of US$15 million on revenue of US$174 million, compared with a loss of US$31 million on revenue of US$88 million during the same period in 2019, according to its filing.

Home exercise company Peloton Interactive was by far Affirm's most important merchant partner, accounting for 30 per cent of its total revenue in the third quarter. Its top 10 merchants, including Peloton, produced about 37 per cent of Affirm's revenue during the period, creating the risk its business could be adversely affected by the loss of any of those partners, according to the filing.

Affirm postponed its IPO from December alongside game developer Roblox, which has since decided to pursue a direct listing.

Morgan Stanley, Goldman Sachs Group and Allen & Co led Affirm's IPO. Its shares are expected to begin trading on Wednesday on the Nasdaq Global Select Market under the symbol AFRM.

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