Affirm Eyes Possible IPO That Could Value POS Lender At $10B

Point-of-sale lender Affirm’s initial public offering (IPO) could reach as much as $10 billion through work with Goldman Sachs, according to people familiar with the matter, The Wall Street Journal (WSJ) reported.

The preparations are at an early stage, however, and the company might choose to sell itself or not go through with the Goldman Sachs deal.

In April 2019, the company had a $2.9 billion valuation, but its target has crept up since then, to over $5 billion and even close to $10 billion, some sources said, according to the WSJ. The company’s primary investors include venture capital firms Founders Fund and Lightspeed Venture Partners as well as mutual-fund giant Fidelity Investments, WSJ reported.

Founded in 2012, Affirm’s business lies in offering shoppers the ability to pay for goods in installments via short-term loans. The company’s financing option is visible on the checkout pages online for big brands like Walmart, Expedia Group and soon the quickly-expanding eCommerce app Shopify.

The deal with Shopify came as the latter company was looking to enter the testing phase for its buy now, pay later (BNPL) product, Shop Pay Installments. Kaz Nejatian, vice president and general manager of Shopify’s financial solutions team, said it was critical for companies to make it easy for customers to buy from them.

The company’s chief executive, Max Levchin, became well known earlier in life when he worked with Peter Thiel to co-found the company that would one day become PayPal, WSJ reported.

Affirm was recently ranked number 3 on PYMNTS’ list of BNPL firms.

The news comes at a time when the IPO market is recovering from a low point during the worldwide quarantines in the spring. Recent IPOs from companies like Lemonade have proved fruitful, as the companies in question focus on digital and mobile business and have flourished during the current times, and thus attracted more investor interest.

Another BNPL company, Afterpay, also went public this year, skyrocketing in value. The company became the largest Australian tech firm through market value during the pandemic, and began to expand to the U.S., WSJ reported, adding 1.6 million new users this year through the move.