Shares of payments company Affirm soared 98% in its initial public offering on the Nasdaq, kicking off what’s likely to be a busy season for market debuts.
Founded in 2013 by PayPal co-founder Max Levchin, Affirm has become prominent in the “buy now pay later” space that offers point-of-sale loans. The company allows customers to finance online purchases that can be paid back in monthly installments without accruing compounding interest.
Affirm makes money when it helps a merchant make a sale. It also earns interest income on loans it buys from bank partners and some consumer loans. The rate it charges varies by consumers’ creditworthiness, but often starts at 0%.
“Our goal is to be a viable alternative to credit cards,” Levchin told CNBC ahead of the company’s first trade.
Morgan Stanley, Goldman Sachs and Allen & Co were the lead underwriters for the offering. Major investors include Peter Thiel’s Founders Fund, Khosla Ventures and Lightspeed Venture Funds.
Affirm’s market debut could mark another successful venture for Levchin, who owns 27.5 million shares in the online lender. Following PayPal’s sale to eBay in 2002, Levchin started the social application company Slide. That sold to Google in 2010 for a reported $182 million.
Affirm… has made CNBC’s Disruptor 50 list twice.