The Company believes that equity capital required as a percentage of total platform portfolio is a useful financial measure to both the Company and investors in assessing the proportion of outstanding loans on the Company's platform that are funded by the Company's own equity capital. The company was founded in 2005 and is based in Stockholm, Sweden. Affirm's latest post-money valuation is from January 2021. Affirm Average Affirm hourly WhatsApp acquired by Facebook). Affirm is a fintech company with a rather unique approach to supplying credit to consumers. Revenue Less Transaction Costs as a Percentage of GMV - The Company defines revenue less transaction costs as a percentage of GMV as revenue less transaction costs, as defined above, as a percentage of GMV, as defined above. Among the largest stakeholders in Affirm are. If you have an ad-blocker enabled you may be blocked from proceeding. Affirm says it has more than 6,500 merchant partners including. The forward-looking statements are made as of the date hereof, and the Company assumes no obligation and does not intend to update these forward-looking statements. It was founded in 2011 and is based in Santa Monica, California. Affirm Raises $500M Series G Round | Affirm Holdings, Inc. 2023-02-10. You can read more about your. Looked at holistically and ignoring the reversal of bad debt provisions in Q2, the company is seeing favorable opex trends. Donte Smith, Defendant. Typically, most consumers have bought these kind of bikes on their cards-but not everyone can make a $2000 purchase on their card. Could the shares trade a substantial premium to that kind of valuation? To supplement the Company's condensed consolidated financial statements, which are prepared and presented in accordance with generally accepted accounting principles in the United States ("GAAP"), the Company presents the following non-GAAP financial measures: transaction costs, transaction costs as a percentage of GMV, revenue less transaction costs, revenue less transaction costs as a percentage of GMV, adjusted operating (loss) income, adjusted operating margin, total platform portfolio, equity capital required, and equity capital required as a percentage of total platform portfolio. The CB Insights tech market intelligence platform analyzes millions of data points on vendors, products, partnerships, and patents to help your team find their next technology solution. Mr. Hochfeld has published more than 500 articles on Seeking Alpha, all dealing with companies in the information technology space. our sites and services. It most recently raised a $500 million Series G round led by Durable and GIC in September. Currency in USD. There are a huge number of fintech startups of varying sizes and varying levels of operational performance. At that time of the Series G stock sale, the company did not disclose the enterprise value assigned as part of the capital raise. Fiscal Year 2021 Financial Highlights:1 All comparisons are made versus fiscal year 2020 unless otherwise stated. Which industries has this organization most actively invested in? Predictions were rife coming into 2023 that we would see a flood of M&A deals for venture-backed startups as funding and IPOs dried up. Affirm Holdings, Inc. (AFRM) Valuation Measures & Financial The loss of Peloton as a merchant partner, or the loss of any other significant merchant relationships, would materially and adversely affect our business, results of operations, financial condition, and future prospects.. Affirm nets huge $500M Series G, bringing total funding Adds Interest-Free Biweekly Payment Product. It offers services such as direct payments, pay-after-delivery options, and installment plans. Of course I do not know the specifics of the anticipated offering. However, these non-GAAP financial measures are presented for supplemental informational purposes only, and these non-GAAP financial measures have limitations as analytical tools. Interestingly, a large portion of Affirms revenue comes from a single merchant partner: Peloton. Essentially, the Affirm platform is able to look at factors beyond credit score to determine a risk profile for an individual borrower in a specific transaction and to make credit offers that are particularly appealing to an individual borrower. AAPL, FB, TWTR), Total amount raised across all funding rounds, Total number of lead investment firms and individual investors, Total number of investment firms and individual investors, Announced Date: Date that the Funding Round was publicly announced, Transaction Name: Auto-generated name of transaction (e.g. Afterpay, the five-year-old Australian company valued at $24 billion, has 13 million registered U.S. customers. The Company believes that total platform portfolio is a useful financial measure to both the Company and investors in assessing the scale of funding requirements for the Company's network. By the end of September, the amount of the portfolio in deferral had fallen to 0.1% of the outstanding loan balance. In 2012, Mr. Hochfeld was convicted of misappropriating funds from a hedge fund he operated. You may opt-out by. WebAffirm Holdings, Inc. (AFRM) NasdaqGS - NasdaqGS Real Time Price. The companys service provides consumer credit at the point of sale. Interestingly, a large portion of Affirms revenue comes from a single merchant partner: . Affirm offers 0% financing for Peloton bikes, and Peloton is its largest customer, making up 30% of its revenue in the quarter ending September 30, 2020. The last IPO I reviewed (C3.AI) (AI) had shares that had trebled since the time of the IPO to a valuation that made little sense-at least to me-and besides that, the growth clothes that are the point of most of these IPOs were conspicuous by their absence. But I have briefly reviewed two names that I consider to be reasonable analogs to the kinds of strategies and opportunities I see Affirm pursuing. (in thousands, except percent data) (unaudited), Add: Stock-based compensation included in operating expenses, Add: Amortization of Shopify Inc. commercial agreement asset, Less: Notes issued by securitization trusts. On a sequential basis, revenues rose by 13.4% last quarter. These investments are expected to benefit the Company's product innovation capabilities and brand awareness in support of its long-term growth objectives. large and successful company with a high growth rate and above average profitability. , the fintech startup known for providing installment loans to shoppers, publicly filed its S-1 with the United States Securities and Exchange Commission on Wednesday. CBI websites generally use certain cookies to enable better interactions with our sites and services. Prior to taking the helm of Affirm, Levchin was most known for co-founding, The San Francisco-based company raised about $1.5 billion in funding from investors including. In IPO Pop, Affirm Doubles In Value To $24 Billion - Forbes A replay will be available on the investor relations website following the call. Transaction Costs - The Company defines transaction costs as the sum of loss on loan purchase commitment, provision for credit losses, funding costs, and processing and servicing expense. View source version on businesswire.com: https://www.businesswire.com/news/home/20210909006033/en/, Affirm Reports Fiscal Year 2021 Fourth Quarter Results. The company derives a significant amount of revenue from the interest it receives on loans held for sale. Equity Capital Required - The Company defines equity capital required as the sum of the balance of loans held for investment and loans held for sale, less the balance of funding debt and notes issued by securitization trusts as of the balance sheet date. That is doubtless frustrating to readers and not terribly salutary for this writer. As the saying goes, a rose by any other name would still be as sweet. My contention is that the growth and margins that Affirm will enjoy have very little in common with the metrics of other lenders or financial institutions. Affirm's deal structure is available for 7 funding rounds, including their IPO from January 13, 2021. Affirm has recently signed a 3 year agreement with Peloton that renews automatically for additional one year terms. Active Consumers - The Company defines an active consumer as a consumer who engages in at least one transaction on its platform during the 12 months prior to the measurement date. Prior to taking the helm of Affirm, Levchin was most known for co-founding PayPal with Peter Thiel in 2000. How many readers believed that Square Cash would achieve the growth trajectory it has. Equity Capital Required as a Percentage of Total Platform Portfolio - The Company defines equity capital required as a percentage of total platform portfolio as equity capital required, as defined above, as a percentage of total platform portfolio, as defined above. Zilch operates as a financial service provider. Affirm has made 5 investments. For the most part, it doesnt matter in the sense that consumers obviously believe they are securing financing for items they want, when they want to buy the items with payments that they can afford. PayRight is an Australian payment plan provider developed for merchants to accelerate return-on-effort and for making things more affordable to consumers, by spreading the cost of purchases over time, without ever paying interest. Lightspeed Venture Partners invested in Affirm's Series G funding round. Affirm Allowance for Credit Losses as a Percentage of Loans Held for Investment - The Company defines allowance for credit losses as a percentage of loans held for investment as GAAP allowance for credit losses as a percentage of GAAP loans held for investment. American Express B2B Cross-Border Payments: Building Business Beyond The Card, First Republics Billions In Losses Show Why Bank Deposits Need More Protection, The Ascendancy Of AI In Asias Financial Services Industry, National Digital ID Is A Foundation For CBDC. Button CTA. I think the valuation of Affirm will be positively influenced by its management team and the entrepreneurial record of Mr. Levchin. CBI websites generally use certain cookies to enable better interactions with. The company had 210 million shares outstanding on a proforma basis after the sale of the Series G preferred shares according to the S-1. Affirm had been planning on launching its IPO before the end of 2020, but it has now delayed that schedule as I will detail below. Affirm has 1 portfolio exit. The Company believes that transaction costs as a percentage of GMV is a useful financial measure to both the Company and investors as it approximates the variable cost efficiency of transactions processed on the Company's platform. 2W 10W 9M. The company offered a payment deferral program for certain borrowers. Definitions of these non-GAAP financial measures are included under "Key Operating Metrics, Non-GAAP Financial Measures and Supplemental Performance Indicators" above, and reconciliations of these non-GAAP financial measures with the most directly comparable GAAP financial measures are included in the tables below. How much funding has this organization raised over time? Affirm savings accounts are held with Cross River Bank, Member FDIC. _______________1 Information about Affirm's use of non-GAAP financial measures is provided under "Key Operating Metrics, Non-GAAP Financial Measures and Supplemental Performance Indicators" and "Use of Non-GAAP Financial Measures" below, and reconciliation of GAAP results to non-GAAP results are provided in the tables at the end of this press release.2 A reconciliation of adjusted operating loss to the comparable GAAP measure is not available on a forward-looking basis without unreasonable effort due to the uncertainty regarding, and the potential variability of, expenses that may be incurred in the future.3 Other costs consists of one-time expenses incurred in the period associated with the Company's initial public offering, its strategic acquisitions, and impairment of right of use assets. At the rate the shares have been appreciating, that wont take a long time regardless of the fact that the company has a current annual revenue run rate of $165 million and hasnt seen much growth lately. According to the press release, published by Affirm, the company has raised a $500 million series G round of funding.The funding round was led by GIC, a returning This allow me to make calculations in term of EV/S that can be compared to other ratios on an apples to apples basis. This sale left the company with a cash balance of $684 million. Consumers I have spoken with are quite enthused about the 0% APR offering and it is one of the reasons why the company has experienced rapid growth. Not this writer. I have seen or read of nothing that will disrupt Affirms competitive position-on the contrary, I see Affirm taking the right steps to solidify its early advantages in the space. Market The company also notes that its revenue from merchant partners in certain industries hit hard by the pandemic declined, but its revenue from partners in other industries saw a big boost. Its offering resonates among younger people who have less access to traditional credit resources-its technology appears to produce better outcomes for its end users, its merchant clients, its funding sources and of course its shareholders. Total revenue less transaction costs was $431.4 million, compared to $160.9 millionin fiscal year 2020, driven by strong revenue growth, and offset by a $90.4 Thats up nearly 93 percent from the same period in 2019. The famous founder here is Max Levchin, an alumni and founder of PayPal PYPL). The companys market cap has swelled past $35 billion. Shop Now Easy Builder Custom build the perfect gaming PC based on the games you play and we will ship it out in 5 business days! This announcement comes on the heels of recent company news, including: Affirm is purpose-built from the ground up to provide consumers and merchants with honest financial products and services that improve their lives. But my belief is that this is one of the better of the current crop of IPOs and if valuation is within hailing distance of comparables, this is a name that should be part of any high-growth tech portfolio. Affirm, a buy-now, pay-later fintech company based in San Francisco, went public today at $49 a sharean implied valuation of $12 billion. Affirm plans to list on the Nasdaq under the ticker AFRM. Fitch to Affirm Houston GO CP Notes Series G-1's S-T Rating at 'F1+' the WSJ had suggested that Goldman, Sachs, a rose by any other name would still be as sweet., Affirm has recently signed a 3 year agreement, Ayden, which is a major and rapidly growing global payment platform. The company has consistently exceeded 100% in terms of dollar based merchant retention-presumably most merchants find Affirm a useful competitive tool and one that helps them fulfill their sales goals. Earlier this month Israeli cybersecurity company Cybereason today announced the completion of a $100 million Series G financing round led by SoftBank Corp. At the time the assumption was that because the latest investment Affirm has six million. Borrowers have been, and are more likely to make payments that are smaller in dollars and relate to a purchase that they are using such as a home exercise bike or a TV or even a puppy than might be the case for buying use a revolving credit card. But based on my investigation thus far, this is one of those e-commerce platforms that is likely to achieve long term success and thus is worthy of detailed investigation even with the IPO not firmly scheduled. The Company is intentionally prioritizing increased investments in both its product and engineering teams, while also increasing its brand and direct response marketing efforts. For the first fiscal quarter of 2021, it posted a loss of $15.3 million. So far, Affirm has grown primarily through its merchant partners and through word of mouth. Please. Stay up to date with recent funding rounds, acquisitions, and more with the The Company believes that active consumers is a useful operating metric to both the Company and investors in assessing consumer adoption and engagement and measuring the size of the Company's network. Transactions per Active Consumer - Transactions per active consumer is defined as the average number of transactions that an active consumer has conducted on its platform during the 12 months prior to the measurement date. Affirm Raises $500M Series G Round I am not going to try to determine if the service offered by Affirm winds up being a better deal for consumers than traditional credit card purchases. Others might suggest that these businesses are really gussied up financial institutions that should be evaluated on those standards. These forward-looking statements reflect the Company's views with respect to future events as of the date hereof and are based on assumptions and subject to risks and uncertainties. As I mentioned earlier, I have no independent way of assessing the companys assertions about the superiority of its credit grading algorithms. Because I try to compare apples to apples, my approach in terms of calculating revenues and free cash flow margin for FOUR, has been and will continue to use gross revenues less network fees. Affirm Stock Price, Funding, Valuation, Revenue & Financial The company also offers consumers virtual cards which are loaded with an approved loan amount and which are issued by Visa. We want to be in the lending business, but we want it to be a clean, good version of it as opposed to this kind of sneaky, let's-make-money-when-you-don't-expect-it, Levchin told Forbes in 2019. Affirms mission is to deliver honest financial products that improve lives. The company has been leveraging the opportunities of its end to end approach and will continue to do so with offers to merchants that are uniquely attractive. There arent many companys with that kind of growth in GMV and those that have enjoyed that kind of growth rate-think of Shopify (SHOP) as an example sell at enormous EV/S ratios-above 40X, actually. 1009-2020. I am not sure just how long it will take for the IPO to be rescheduled and of course I have no idea what the revised terms will look like. The company calls out a differentiated technology that has been able to increase credit approvals while creating a high performing and rapidly maturing pool of assets. The strategic progress we achieved in fiscal year 2021 sets us up for long-term growth. It can offer some consumers a 0% APR loan which has created lots of word of mouth excitement amongst consumers. Affirm was spun out of one of his ventures in 2012. Similar to adjusted operating (loss) income, the Company believes that adjusted operating margin is a useful financial measure to both the Company and investors for evaluating its operating performance and that it facilitates period to period comparisons of the Company's results of operations as the items excluded generally are not a function of the Company's operating performance. WebFind out all the key statistics for Affirm Holdings, Inc. (AFRM), including valuation measures, fiscal year financial statistics, trading record, share statistics and more. I have to start this article by stating the obvious: the market is very frothy and investors seem to be losing their connections to a realistic valuation paradigm. Unlike payment options that have late fees, compounding interest and unexpected costs, Affirm shows customers up front exactly what theyll pay with no hidden fees and no surprises. Affirm went public in January at $49 a share, and its stock price has since jumped by over 150% to $133.70 on Wednesday. Its sales and marketing effort is nascent. The company has yet to reach profitability, and is just now reaching a position of positive contribution profit. The Company believes that total revenue as a percentage of GMV is a useful performance indicator to both the Company and investors of the revenue generated on a transaction processed on the Company's platform. Our solutions use the latest in machine learning, artificial intelligence, cloud-based technologies, and other modern tools to create differentiated and scalable products. In any event, the deferral program was used by just 63k borrowers deferring payments on less than $20 million of loan principle. : 6,947,972 shares of Class A common stock and Class B common stock each. Mr. Levchin has assembled what appears to be a very capable executive team with a great deal of specific experience in the credit and fintech spaces. Baillie Gifford & Co., Durable Capital Partners, Fidelity Investments, Founders Fund, GIC, Lightspeed Venture Partners, Spark Capital, and Wellington Management. Overall, I think the advantages that Affirm has within the POS credit market are of sufficient magnitude that it likely they will continue to dominate the broadly defined space-and the space itself is likely to experience continued rapid growth. Affirm Raises $500M Series G Round | Business Wire Affirm shares one thing in common with C3.AI, a famous founder who is well known in the IT industry and whose experience is on point for this company. And I have been told that most consumers who have used the service like it and will be repeat customers. With 6500 merchant partners, and several million users, Affirm is the largest company in its niche. Affirms most recent valuation is not known. Its commerce platform, agreements with originating banks, and Affirm's valuation in April 2019 was $2,600 - $2,900M. Affirm reported a net revenue of $509.5 million for the fiscal year that ended on June 30, 2020. It gathers discrete data points of customers to build a financial identity and deliver instant credit. against. I have linked here to the app for those interested in seeing what is being offered: Download a new way to pay over time | Affirm App. Those kind of metrics in this kind of world could readily produce an outsize valuation-the major impediment so to speak is what will apparently be a modified IPO strategy involving more shares from selling shareholders to soak up excess demand. In the spring of 2020, the company sold $75 million of convertible debt. The company is also introducing an interest-free biweekly payment product for transactions as low as $50. The People of the State of New York. Last quarter, Affirm grew revenues at 98% and grew its commerce revenues by 146%. Following the onset of the COVID-19 pandemic, our revenue from merchant partners in the travel, hospitality, and entertainment industries declined, but we saw a significant increase in revenue from merchant partners offering home fitness equipment, home office products, and home furnishings, though we may see potential downswing in these categories if the trends we have seen thus far in the COVID-19 pandemic reverse, the company wrote. We remain focused on extending our leadership position with our core products, while capitalizing on our vast opportunities to empower more people with the new ones we continue to launch.. Worth noting is that Shopify is a 5% shareholder. round led by Durable and GIC in September. Certainly I am not. Because of the increase in the proportion of 0% APR loans the company in the quarter, the company saw a rather sharp increase in merchant fees. For readers wanting to do a deep dive on this company, a few paragraphs from the S-1 are important to consider: Technology is at the core of everything we do. The pandemic has tilted Affirms trajectory steeply upward, as it has for many fintech companies. Risa Procton, Esq., Queens County Legal Aid Society, affirm. I am not inclined to think that Pay in 4 itself will have any material influence on the growth of Affirm). WebAffirm is a financial technology services company that offers installment loans to consumers at the point of sale. The company has an extensive list of venture investors with the 3 largest investors being Jasmine, Lightspeed and Founders Fund. Affirm has raised over $1.3 billion from investors to date. While consumers in the U.S. latched on to early plant-based meat alternatives, vegan seafood didnt see the same rise in popularity. These forward-looking statements involve known and unknown risks, uncertainties and other important factors that may cause the Company's actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Not all readers will be familiar with all fintech companies. Affirm Raises $500M Series G Round - FinTech Ranking Active Merchants - The Company defines an active merchant as a merchant which engages in at least one transaction on its platform during the 12 months prior to the measurement date. It offers a 'buy now, pay later service that allows users to pay for a purchase in the course of six weeks without any fees or interest. Unlike credit cards and other pay-over-time options, we show consumers exactly what they will pay up front, never increase that amount, and never charge any late or hidden fees. All statements other than statements of historical fact are forward-looking statements, including statements regarding: the Company's strategy and future operations, including the Company's partnerships with Amazon and Shopify; the development, innovation, introduction and performance of the Company's products, including the Debit+ Card; acquisition and retention of merchants and consumers; the Company's future growth, investments, network expansion, product mix, brand awareness, financial position, gross market value, revenue, transaction costs, operating income, provision for credit losses, and cash flows; and general economic trends and trends in the Company's industry and markets. Some things have changed since then to be sure, and I imagine the article would look a bit different were it being written in December 2020.
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