Point-of-sale lender Affirm could see its valuation skyrocket this year.
Founded in 2012 by PayPal cofounder Max Levchin along with Jeffrey Kaditz and Nathan Gettings, Affirm enables shoppers to pay for goods in installments using short-term loans. Last year, it launched an app allowing its customers to use the service at almost any online or brick-and-mortar store that accepts Apple Pay or Google Pay. In June, the company launched a partnership with eCommerce platform Shopify.
Affirm currently works with more than 6,000 merchants across every vertical — home and lifestyle, apparel, consumer electronics, travel, and more, including brand names like Dyson, Warby Parker, and West Elm. The company also saw a boost in usage during the COVID-19 pandemic.
“Affirm’s value has become increasingly apparent as merchants adjust to an unprecedented environment. Some of our merchants, particularly in the home office and home fitness categories, have experienced exceptional momentum. Others have needed more support navigating the rapid shift to online shopping. In either case, we’ve seen that offering Affirm’s buy now, pay later financing solution drives growth,” said Levchin.
The Wall Street Journal reports that the company is working with Goldman Sachs to go public in an IPO that could reach as much as $10 billion.
The company raised $300 million last year in a Series F round led by Thrive, as well as $800 million from companies like Ribbit Capital, Founders Fund, Andreessen Horowitz, Khosla Ventures, Lightspeed Venture Partners, and others.
In April 2019, the company had a $2.9 billion valuation, but its target has soared since then, to over $5 billion and even close to $10 billion, according to some sources. One of its options is to go public via a special purpose acquisition company (SPAC). There is also a chance Affirm could forgo the IPO and decide to sell itself, possibly to a so-called blank check company.
If it does decide to file an IPO, Affirm would be in good company. Afterpay—another buy now, pay later firm—also recently went public and became the largest Australian FinTech through market value during the pandemic.