Shopify Makes $2 Billion From Affirm Going Public and Soaring

San Francisco-based financial tech company Affirm went public this week in the market and had an explosive first day of trading.

The fintech company soared 98% to close at $97.24 on its first day of trading on Wednesday after the lender priced its IPO at $49 a share.

According to Affirm’s S-1 filing, its payment platform allows “consumers to pay for purchases in fixed amounts without deferred interest, hidden fees, or penalties.”

“Since our founding in 2012, we have charged $0 in late fees for missed payments, we never profit from consumers’ mistakes, and we are transparent in our product offerings,” the filing also read.

Affirm has said that as of September 30, 2020, more than 6.2 million consumers have completed approximately 17.3 million transactions with over 6,500 merchants the platform.

For the fiscal year ending June 30th, 2020, Affirm reported revenue of $509.5 million. This is in comparison to $264.4 million a year earlier and represents year-over-year growth of approximately 93%.

Affirm’s net loss went down to $112.6 million for its latest fiscal year, compared to $120.5 million for fiscal year ending June 30, 2019.

One of the company’s top merchant partners is Peloton, who Afirm says its reliance on has grown since home exercise equipment has been soaring in the past year. Peleton represents approximately 28% of the company’s total revenue for fiscal year ended June 30th, 2020.

“A large percentage of our revenue is concentrated with a single merchant partner, and
the loss of this merchant partner or any other significant merchant relationships would materially and adversely affect our business, results of operations, financial condition, and future prospects,” said the filing from the company.

Affirm was founded by PayPal (PYPL) co-founder Max Levchin.

One of the biggest winners from Affirm’s IPO was Shopify who as a partnership that formed last July, owns over 20 million shares of the company.

Based on Affirm’s stock price after its debut on Wednesday, Shopify’s stake is worth about $2 billion now.

Affirm said in its prospectus that the deal with Shopify allowed it “to significantly expand the number of merchants and consumers on our platform.”

Shopify serves more than a million businesses. Affirm CEO and founder Max Levchin told CNBC at the time of the deal that Shopify and Affirm will have a “tightly integrated partnership” that lets merchants “flip a switch” to have the product go live.

“We expect massive uptake,” Levchin said. “By making the integration so easy, we expect it to be extremely close to total ubiquity.”

Disclaimer: We have no position in any of the companies mentioned and have not been compensated for this article.