Affirm Holdings, which offers closed-ended installment loans for online purchases, filed on Wednesday with the SEC to raise up to $100 million in an initial public offering. However, this is likely a placeholder for a deal we estimate could raise up to $1 billion.
Affirm states that it is building the next generation platform for digital commerce. Its platform comprises three core elements: a point-of-sale payment solution for consumers which allows payment for purchases in fixed amounts, merchant commerce solutions, and a consumer-focused app. As of September 30, 2020, more than 6.2 million consumers have completed approximately 17.3 million transactions with over 6,500 merchants on Affirm's platform. Approximately 64% of loans facilitated through its platform during the fiscal year ended June 30, 2020 were taken out by repeat consumers, and its dollar-based merchant retention rate is above 100% across each cohort that joined since 2016.
The San Francisco, CA-based company was founded in 2012 and booked $596 million in revenue for the 12 months ended September 30, 2020. It plans to list on the Nasdaq under the symbol AFRM. Affirm Holdings filed confidentially on October 8, 2020. Morgan Stanley, Goldman Sachs, Allen & Company, RBC Capital Markets, Credit Suisse, and Barclays are the joint bookrunners on the deal. No pricing terms were disclosed.
