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.

Max Levchin

Affirm, a point-of-sale microlender that lets consumers make purchases with the flexibility to defer their payments over time, is eyeing an IPO with the aid of Goldman Sachs, the Wall Street Journal reported.
The move could see Affirm’s value soar to up to $10 billion, according to the WSJ report.
The possible IPO comes as buy now, pay later has been riding a wave in 2020, buoyed by an increase in online shopping demand and consumers’ caution about over-extending their budgets during the coronavirus pandemic.

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Buy now, pay later has been having a moment in 2020 — and one top fintech in the space is now reportedly seeking to go public, with Goldman Sachs’s help.

The buy now, pay later lender Affirm, which enables online shoppers to use microloans to defer their payments on goods they purchase online, is said to be eyeing an initial public offering that could value it at up to $10 billion, the Wall Street Journal first reported on Thursday.

Last year, Pitchbook valued Affirm at $2.9 billion.

Goldman Sachs is said to be working with Affirm on listing preparations, WSJ noted. Both Affirm and Goldman Sachs declined to comment on the reporting to Business Insider.

The potential IPO isn’t set in stone, however, WSJ said, noting that the prep work is still in its early stages and the company isn’t guaranteed to go through with it. 

Affirm has been planting the flag in the digital retail space in recent months, in a trend that has gained steam as consumers have tightened their budgets and moved to online shopping during the coronavirus pandemic.

The digital lender is accepted by more than 6,000 merchants, Business Insider previously reported. Founded in 2012 by Max Levchin, Affirm has been on a roll this summer, announcing last week that it would be Shopify’s exclusive partner for buy now, pay later transactions.

Read more: Here’s how PayPal is looking to boost its credit business by leaning into a buy now, pay later frenzy

  Let's talk about his face for a minute

“Tens of millions of US consumers are going to be exposed to Affirm, which is a huge leap for us in terms of just being visible,” Levchin told Business Insider at the time of the announcement.

If Affirm doesn’t decide to go public with an IPO, another alternative available to the company would be selling itself to a special purpose acquisition company, WSJ noted.

SPACs, or so-called blank check companies, raise money through an IPO and then merge with existing companies to take them public.

There have been a rush of SPAC debuts in recent weeks, and they’ve cropped up elsewhere as an option as companies look for paths to the public markets. Uber announced a deal to buy food-delivery company Postmates earlier this month, but Postmates had also been looking at a traditional IPO as well as a possible SPAC deal. 

See more: UBS has started pitching its wealth management customers on ‘blank-check’ companies as the bank looks to tap into a SPAC frenzy

Affirm says its …read more

Source:: Business Insider – Tech

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