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Affirm just made its IPO filing public, providing the first detailed look inside the breakout ‘buy now, pay later’ fintech startup’s finances

Summary List Placement Affirm made its initial public offering documents publicly available on Wednesday, providing the most detailed look yet at the company's inner financial workings. Affirm, a fintech startup founded in 2012 by PayPal co-founder Max Levchin, is among a cohort of "buy now, pay later" startups that enable consumers...

max levchin affirm SUN VALLEY, ID - JULY 10: Max Levchin, co-founder of PayPal and chief executive officer of financial technology company Affirm, arrives at the Sun Valley Resort for the annual Allen & Company Sun Valley Conference, July 10, 2018 in Sun Valley, Idaho. Every July, some of the world's wealthiest and most powerful business people in media, finance, technology and political spheres converge at the Sun Valley Resort for the exclusive week-long conference. (Photo by Drew Angerer/Getty Images)

Summary List Placement

Affirm made its initial public offering documents publicly available on Wednesday, providing the most detailed look yet at the company’s inner financial workings.

Affirm, a fintech startup founded in 2012 by PayPal co-founder Max Levchin, is among a cohort of “buy now, pay later” startups that enable consumers to use microloans to defer their payments on goods they purchase online.

The company reported a net loss of $125.8 million during its latest fiscal year, which ended on June 30, down more than 6% from FY 2019.

Affirm’s annual revenue increased to $509.5 million, up 93% from $264.4 million year-over-year — total expenses also grew around 67% during the same period to $617.3 million from $391.8 million, according to the filing.

Affirm reported just shy of $174 million in quarterly revenue for Q1 2021, up nearly 98% from $87.9 million during the same quarterly period last year, while net losses dropped by around half to $15.3 million from $30.6 million as installment payment startups have exploded during the pandemic

Affirm is planning to list its Class A shares on the Nasdaq under the ticker symbol “AFRM,” while Levchin and others will be issued Class B shares with 15-to-1 voting rights that will allow them to maintain control over the company.

Goldman Sachs, Morgan Stanley, Allen & Company, and Barclays are listed among the banks underwriting the offering, through which Affirm said it’s expecting to raise $100 million — a likely placeholder number. The startup could seek up to a $10 billion valuation, The Wall Street Journal reported in October.

Affirm was valued at $2.9 billion in April 2019 and has raised $1.6 billion to date from investors, according to PitchBook. Its largest investors, according to Wednesday’s filing, are Jasmin Ventures, Lightspeed Venture Partners, Founders Fund, Khosla Ventures, and Shopify.

Read more: Inside 2020’s buy now, pay later frenzy: the new twist on financing that is a must have for everyone in the lead up to the holiday season

Online sellers have been looking to services like Affirm as a way to entice shoppers to keep spending despite economic fallout from the pandemic, and these buzzy startups have seen a surge in inbounds from merchants across all industries, including fashion, home goods, and airlines.

Despite a tough environment for venture-backed companies, Levchin told Business Insider’s Shannen Balogh in April that Affirm was “eyeing expansion opportunities as opposed to trying to hunker down and just survive by any means necessary.”

The company reported that gross merchandise volume, or the total amount consumers paid for online using its services, increased 77% to $4.6 billion over the past fiscal year.

Affirm partners with merchants big and small, from international brands like Adidas to niche retailers like Brooklinen and Peloton as well as an exclusive partnership with Shopify — more than 6,000 in total, Business Insider previously reported.

The relative size of those partnerships could also be a liability, however. Affirm said in the filing that Peloton alone accounted for 28% of its revenue during Q1 2021 — a growing proportion that it attributed to the rise of spending on home fitness equipment during the pandemic —  while its top ten merchants accounted for around 35% of its revenue during FY 2020.

Read more: Affirm is reportedly eyeing an IPO that could value it at $10 billion. Here’s how the buy now, pay later fintech became one of the breakout stars of 2020.

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