So, from my perspective, any EV/S ratio of 20X or less is reasonable. Yes, I do imagine there will be a correction of some magnitude and for some time period, but no, I do not see this as an analog to that which was experienced at the turn of the century. Our solutions use the latest in machine learning, artificial intelligence, cloud-based technologies, and other modern tools to create differentiated and scalable products. Affirm is a significant competitive advantage for Walmart. Starting in the 1990s, Mr. Hochfeld worked as a sell-side analyst and won awards from the Wall Street Journal for his coverage of the software space. Affirm plans to list on the Nasdaq under the ticker AFRM. On a sequential basis, revenues rose by 13.4% last quarter. Mr. Hochfeld has published more than 500 articles on Seeking Alpha, all dealing with companies in the information technology space. WebFind out all the key statistics for Affirm Holdings, Inc. (AFRM), including valuation measures, fiscal year financial statistics, trading record, share statistics and more. This company experiences notable seasonality typical of consumer retail buying patterns. Greensky has had its share of issues during the pandemic. iBUYPOWER: Gaming Computers, Custom PCs and Laptops I have linked here to a Forbes article about Cross River as it was a year ago. Affirm has a nascent partnership with SHOP with an offering called Shop Pay installments. The foregoing is an article about a company called Affirm (NASDAQ:AFRM) which is apparently planning an IPO in a few weeks. How many readers believed that Square Cash would achieve the growth trajectory it has. 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. Highly esteemed for his investment wisdom accumulated over decades, Mr. Hochfeld ranks in the top 0.1% of Tip Ranks analysts for his selection of information technology stocks and their subsequent successes. Affirm went public in January at $49 a share, and its stock price has since jumped by over 150% to $133.70 on Wednesday. If nothing else, that agreement provides enormous credibility for Affirm. That said, servicing revenues are still less than the cost of servicing and were just 2.3% of revenues in the September ending quarter. A Delaware stock authorization form stated that Series G shares were sold at a more than 90% discount, "Axios" reports. Still, it is something that may be of interest to readers: The Forbes Investigation: Inside The Secret Bank Behind The Fintech Boom. As mentioned. Were excited about this vote of confidence from both new and existing investors as we advance our SAN FRANCISCO September 17, 2020 By offering Affirm, our 6,000 merchant partners can Others continue to feel that these companies will not achieve the kind of growth that supports their current valuation. Currently, the proportion of loans with a 0% APR has reached 46% and that is up from 31% in the prior year. Affirm nets huge $500M Series G, bringing total funding There are a huge number of fintech startups of varying sizes and varying levels of operational performance. Shopify: Undisclosed, but listed as a 5 percent stockholder. The company offered a payment deferral program for certain borrowers. In turn, this has apparently lead to a shorter duration loan than is the case for most revolving credit loans which automatically renew. It charges interest in about half of its transactions, making most of its revenue through fees charged to merchants. At some level, a company like Affirm might be said to compete with PayPal-but in terms of the realities of competition, that is a stretch. Affirm is now accepted as a payment method for consumers using the Ayden platform. The other side of the transaction is that Affirm bills its merchant partners a higher fee for extending credit on an APR basis. It was founded in 2018 and is based in London, United Kingdom. In the last reported quarter, Peloton (PTON) accounted for 30% of total revenues. Affirm says it has more than 6,500 merchant partners including Tonal, Dyson, Gucci, and Expedia. In IPO Pop, Affirm Doubles In Value To $24 Billion - Forbes Decided on March 30, 2023. Trying to disentangle all of the competing claims about who offers what to whom would be a bootless undertaking. 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. It is standard these days for fintech firms to assert that they have competitive advantages based on their unique credit scoring technology. press@affirm.com 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. A replay will be available on the investor relations website following the call. 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. The initial offering is perhaps a bit circumscribed in that credit is only being advanced for 2 months with payments due every two weeks but presumably this is the start of a more far-reaching set of offers that Affirm will be able to present to end customers of the base of Shopify merchants. The offering from Affirm is in the nature of a virtuous circle in which borrowers, funding sources and Affirm all benefit by the specific nature of the companys offerings and technology. 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 Alongside this new capital, our latest product is another step towards becoming as ubiquitous as credit cards Affirm is now an even more attractive payment option for everyday wants and needs, Levchin added. Fitch to Affirm Houston GO CP Notes Series G-1's S-T Rating at 'F1+'. It can offer some consumers a 0% APR loan which has created lots of word of mouth excitement amongst consumers. Affirm Raises $500M Series G Round | Business Wire Given the growth expectations for this company, I imagine that sales and marketing expense will continue to grow as an expense ratio from current levels. Fourth Quarter of Fiscal Year 2021 Financial Highlights:1 All comparisons are made versus the same period in fiscal year 2020 unless otherwise stated. The Company believes that active merchants is a useful performance indicator to both the Company and investors because it measures the reach of the Company's network. The concept is to limit any first day pop, and to secure a better overall return for selling shareholders, while limiting the returns achieved by those lucky enough to get allocations on an IPO. 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. The company reported a positive contribution margin last quarter. I will attempt to provide some rough metes and bounds that relate to what I consider to be a fair enterprise value for the company. By the end of September, the amount of the portfolio in deferral had fallen to 0.1% of the outstanding loan balance. Affirm has raised over $1.3 billion from investors to date. our sites and services. Affirm Reports Fiscal Year 2021 Fourth Quarter Results | Affirm I think the strategy might be able to work, but of course I cannot be sure. Our machine learning-based risk models are currently calibrated and validated on more than one billion individual data points, based on a complex set of variables, and are custom built to effectively detect fraud, price risk, and provide customized recommendations. Affirm narrowed its net loss in fiscal 2020 to $112.6 million, compared with a loss of $120.5 million a year earlier. Other returning investors include Lightspeed Venture Partners, Wellington Management Company, Baillie Gifford, Spark Capital, Founders Fund, and Fidelity Management & Research Company LLC. Interestingly, a large portion of Affirms revenue comes from a single merchant partner: . Back in July, The Wall Street I wish I didnt have to write that-but while there are many differences between now and the .com bubble, there are some similarities as well. Apparently that is not going to be a problem of the same magnitude experienced by prospective investors in recent IPOs. Affirm is a fintech company with a rather unique approach to supplying credit to consumers. It offers services such as direct payments, pay-after-delivery options, and installment plans. One of the concepts here is that credit based on a specific asset such as an exercise bike or an airline ticket has a better chance of being repaid than extending credit without any concern about the nature of the purchases. Lightspeed Venture Partners: 9,370,230 shares of Class A common stock and Class B common stock each. Defendant. The strategic progress we achieved in fiscal year 2021 sets us up for long-term growth. This financing was based on the sale of 21.8 million shares of Series G preferred shares. Valuations are submitted by companies, mined from state filings or news, provided by VentureSource, or based on a comparables valuation model. Affirm Holdings, Inc. operates a platform for digital and mobile-first commerce in the United States, Canada, and internationally. For the first fiscal quarter of 2021, it posted a loss of $15.3 million. Ana Braskamp Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body. 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. But the companys service has already been used by 6.4 million consumers. Overall, the trends of servicing revenue and costs are quite favorable. Consumers seem attracted to this kind of transparent borrowing and funding sources find the high velocity of repayments to be congruent with their own needs. Apple Savings, Financial Health And Bankings Future, Apple, Goldman Sachs And BAM Fintechs Take A Bite Out Of Traditional Banking. : 8,525,053 shares of Class A common stock and Class B common stock each. Thing again! These days, tech IPOs seem to reap valuations detached from any analytical reality. WebThis opinion is uncorrected and subject to revision before publication in the printed Official Reports. The company focuses on contribution margins which are basically a marginal profit calculation that excludes a number of opex items including technology and general and administrative expense that are not volume related. Freelance Writers: How To Pitch Crunchbase News, After Years Of Sinking Venture Funding, Plant-Based Seafood Charts A New Course, 4 Charts Show Startup M&A Deal-Making Is Not Moving In The Direction We Expected, The 10 Biggest Rounds Of March: Stripe Raises Huge $6.5B Round, HR-tech Startup Rippling Lands $500M, E-Commerce Company Boxed Files For Bankruptcy As Online Grocery Struggles, Global VC Funding Falls Dramatically Across All Stages In Rocky Q1, Despite Massive OpenAI And Stripe Deals, 5 Interesting Startup Deals You May Have Missed In March: Space Sweepers, Better Tattoo Care And More AI, Asia Venture Funding Drops 57% Year Over Year, With Late Stage Posting Largest Decline. 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. 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. : Undisclosed, but listed as a 5 percent stockholder. Jasmine Ventures: 11,003,701 shares of Class A common stock and Class B common stock each. For merchants, adding Affirm is simple and can take as little as one hour. Not all readers will be familiar with all fintech companies. I have no reason to doubt the statement and of course given the background of the CEO and the rest of the management team, it makes sense to me that the company would be in a position to create differentiated offerings. Sign up for a free trial to see Affirm's valuations in January 2021 Fourth Quarter and Fiscal Year 2021 Operating Highlights: All comparisons are made versus the same period in fiscal year 2020 unless otherwise stated. I imagine that the partnership will further accelerate the growth of merchant partners who use Affirm to accelerate their sales performance. More consumers and merchants are continuing to choose Affirm because of our ability to offer a variety of ways to pay, thanks to our unrivaled technology. POS lending solution Affirm closes $500m Series G Please note that I deliberately used the word niche as opposed to space. I am not inclined to think that Pay in 4 itself will have any material influence on the growth of Affirm). We are also able to access and leverage SKU-level data, which we believe gives us a proprietary data advantage.. As mentioned, because of the pandemic, the company has had a rather volatile level of loss provisions. Digital consumer lending service Affirm has completed a $300 million Series F led by Josh Kushner's Thrive Capital, with participation from new Affirm provides more than 5.6 million U.S. and Canadian consumers a better alternative to traditional credit cards, giving them the flexibility to buy now and pay over time at virtually any store. Obviously that kind of progression will not continue and I think it is best to look a growth for this company in terms of its growth in GMV. Baillie Gifford & Co., Durable Capital Partners, Fidelity Investments, Founders Fund, GIC, Lightspeed Venture Partners, Spark Capital, and Wellington Management. It could, quite conceivably, however achieve growth in the 75% range. Overall, the fee revenue as a percentage of GMV increased from 4.2% to 6.3%. The company has been experiencing explosive growth in revenues and it was planning for an IPO before the end of the year. (in thousands, except share and per share amounts), Securitization notes receivable and residual certificates (at fair value), Liabilities, Redeemable Convertible Preferred Stock and Stockholders Deficit, Redeemable convertible preferred stock, $0.00001 par value, 30,000,000 and 124,453,009 shares authorized as of June 30, 2021 and June 30, 2020, respectively; zero and 122,115,971 shares issued and outstanding as of June 30, 2021 and June 30, 2020, respectively; liquidation preference of $0 and $809,032 as of June 30, 2021 and June 30, 2020, respectively, Common stock, $0.00001 par value, no shares authorized, issued and outstanding at June 30, 2021; 232,000,000 shares authorized, 47,684,427 shares issued and outstanding as of June 30, 2020, Class A common stock, par value $0.00001 per share: 3,030,000,000 shares authorized, 181,131,728 shares issued and outstanding as of June 30, 2021; no shares authorized, issued and outstanding as of June 30, 2020, Class B common stock, par value $0.00001 per share: 88,226,376 shares authorized, issued and outstanding as of June 30, 2021; no shares authorized, no shares issued and outstanding as of June 30, 2020, Accumulated other comprehensive gain (loss), Total Liabilities, Redeemable Convertible Preferred Stock and Stockholders Deficit, CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS, Excess return to preferred stockholders on repurchase, Net (Loss) Income Attributable to Common Stockholders. I imagine that many readers, as well as this author had never heard of Affirm. Mr. Hochfeld has enjoyed a long career in the tech world, working for IBM, Memorex/Telex, Raytheon Data Systems, and BMC Software. Sales in the March quarter showed minimal sequential growth followed by a substantial bounce back in the June quarter, and some moderation of sequential growth in the September quarter. The company has apparently created technology that has allowed it to develop a high-yielding, short duration portfolio of credits that is attractive to funding sources. These investments are expected to benefit the Company's product innovation capabilities and brand awareness in support of its long-term growth objectives. It is not going to be cheap-the kind of growth this company is experiencing is not going to come at a discount. The loans held for sale grew by 59% year over year, but the return declined from 21% to 18% as a function in the proportion of 0% APR loans in the Affirm portfolio. You can read more about your cookie choices at our privacy policyhere. The Forbes Investigation: Inside The Secret Bank Behind The Fintech Boom, Download a new way to pay over time | Affirm App. Klarna offers a range of payment solutions to e-stores. : 11,003,701 shares of Class A common stock and Class B common stock each. Gross Merchandise Volume ("GMV") - The Company defines GMV as the total dollar amount of all transactions on the Affirm platform during the applicable period, net of refunds. 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 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. FedNow Real-Time Payments Are Here. That is doubtless frustrating to readers and not terribly salutary for this writer. Affirm, 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. Founders Fund: 8,525,053 shares of Class A common stock and Class B common stock each. 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. Their latest investment was in NYDIG as part of their Growth Equity - IV on December 12, 2021. It has focused on prime+ credit customers. Entering text into the input field will update the search result below. In addition, the Company uses these non-GAAP financial measures in conjunction with financial measures prepared in accordance with GAAP for planning purposes, including the preparation of its annual operating budget, and for evaluating the effectiveness of its business strategy. It was founded in 2011 and is based in Santa Monica, California. Fitch to Affirm Houston GO CP Notes Series G-1's S-T Rating at 'F1+' The sequential increase in commerce sales last Q4 was spectacular-reaching a triple digit pace. The Company plans to provide additional detail on the financial impact of the partnership in subsequent quarters, The Company has also not included any potential GMV or Revenue contributions from its forthcoming rollout of Affirm Debit+ and plans to update its outlook as the offering is more widely available, The Company expects a moderation in GMV and revenue from Peloton in fiscal year 2022. 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. Transaction Costs as a Percentage of GMV - The Company defines transaction costs as a percentage of GMV as transaction costs, as defined above, as a percentage of GMV, as defined above. The company has been achieving remarkable growth with total revenue growth reaching 98% last quarter accelerating from 93% in the prior fiscal year. Affirm Worth noting is that Shopify is a 5% shareholder. But what I can say, is that the statistics and metrics regarding deferrals and charge-offs seem to me to be substantial evidence that the companys claims should be accepted in whole or in part, and that is one huge reason to expect that this company will achieve high valuations and enjoy very successful operating results compared to other companies in the space. Chargebee, a subscription billing and revenue management platform, is valued $1.4 billion following a $125 million Series G. Affirm seeks to go beyond buy now Back in July, The Wall Street Journal, which broke the news of Affirms plans for an IPO, estimated valuation at $5 billion to $10 billion. Angel - Uber), Number of Investors: Total number of Investors in a Funding Round, Money Raised: Amount of money raised in Funding Round, Lead Investors: Name of the investor who led the investment in the funding round, The date when the Organization went public, Investor Name: Name of the investor who participated in the Investment, Lead Investor: This field indicates whether an investor led/organized the investment, Funding Round: Name of the funding round where the Investment is made, Partners: Name of the individual who led a funding round for his/her firm, Announced Date: Date when the Investment is announced, Organization Name: Name of the organization that received the investment, Acquiree Name: Name of the acquired organization, Announced Date: Date the acquisition was announced, Transaction Name: Auto-generated name of transaction (e.g.