Tech companies closed out 2020 with several blockbuster IPOs, including the much-hyped debuts of Airbnb and DoorDash. But Affirm Holdings, which has the distinction of becoming the first big tech IPO of 2021, is already a positive affirmation of the market’s prospects in the new year.
The fintech payments company, which was founded by PayPal cofounder Max Levchin, soared on its Nasdaq debut Wednesday, beginning trading at $90.90 per share—more than 80% higher than its earlier pricing of $49 a share.
Major investors in the company’s offering included Peter Thiel’s Founders Fund, Khosla Ventures, Lightspeed Venture Funds, and e-commerce firm Shopify.
Affirm, which works with around 6,500 retailers including Walmart, Wayfair, Peloton, and Warby Parker, lets customers finance online purchases with monthly payments that do not accrue compounding interest; instead, it makes a profit through merchant fees whenever purchasers choose its lending option. According to its IPO filing, more than 6.2 million people use the service.
The company raised about $1.2 billion through the offering, countering a reported debt of $1.1 billion as of June 2020.
Aside from signaling another potentially lucrative venture for Levchin—whose résumé along with PayPal includes social company Slide, which was sold to Google for $182 million in 2010—Affirm’s IPO pop looks good for the stock market in 2021, which is coming off a historic year of debuts. In 2020, record amounts of capital were raised during IPOs across various sectors, constituting the strongest IPO market in two decades.
In midday trading, Affirm’s stock had risen by more than 100%, changing hands at $99.17 per share.