GIC portfolio company Affirm soars on Nasdaq market debut

Max Levchin, CEO and founder of Affirm

Yet another of Singapore sovereign wealth fund GIC’s portfolio company has gone public, in the latest tech initial public offering in the US.

Shares in online consumer lender Affirm Holdings nearly doubled in its first day of trading on Nasdaq. It closed on Wednesday with a market capitalisation of $23.6 billion, based on the number of outstanding shares. 

Affirm had priced its shares at $49 apiece, which was beyond the top end of the original price range, raising $1.2 billion in the IPO.

According to the company’s prospectus filed with US regulators, GIC is the largest investor outside of the company’s directors and management. It has an 8.6% post-offering stake in the company, or 22,007,406 shares valued at nearly $1.1 billion at the IPO price.

E-commerce company Shopify holds about 8% in Affirm.

Jasmine Ventures, a fund controlled by GIC, invested in the San Francisco-based “buy now, pay later” platform in December 2017, leading the $200 million Series E equity fundraising round. The fund returned in Affirm’s later rounds. In September last year, it co-led the company’s $500 million Series G funding. 

All in, investors including Founders Fund and Lightspeed Venture Partners provided some $1.3 billion in funding to Affirm before its flotation.

Affirm, co-founded by PayPal alumnus Max Levchin in 2012, allows shoppers to pay for their purchases online in installments, and also offers them interest-bearing loans. The company earns from charging merchants a fee on the transactions.

Other players include Australian company AfterPay, which has a market capitalisation of $31.4 billion Australian dollars; and Klarna. The Swedish company announced a $650 million fundraise in September led by Silver Lake Partners that valued it at $10.5 billion, ahead of a possible IPO. GIC is also an investor in Klarna. And in August last year, PayPal also introduced a ‘buy now pay later’ product.

According to Affirm’s prospectus, as of September 30, 2020, there were about 17.3 million transactions made from more than 6.2 million customers, with more than 6,500 merchants on its platform. Gross merchandise volume, net of refunds, amounted to $4.64 billion in the year to June 30, 2020. GMV for the three months ended September 30, 2020 amounted to $1.48 billion.

Peloton, the exercise bike maker, is the platform’s single largest merchant, accounting for about 28% to 30% of total revenue. Other merchants on the platform include home appliances maker Dyson, travel platform Expedia, and Walmart. 

For its financial year ended June 30, 2020, Affirm recorded revenue of $509.5 million, or 93% higher than a year earlier. However, the company is still in the red, though losses have narrowed slightly. Net losses for its 2020 financial year amounted to $112.6 million, or 6.6% lower than the previous year. For the three months ended September 30, 2020, the company incurred a net loss of $15.3 million.

Other GIC portfolio companies that went public recently include US food delivery company DoorDash, and cybersecurity company McAfee.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.