Initial Public Offering (IPO) reaches a value of $1.2 billion

Initial Public Offering (IPO) reaches a value of $1.2 billion

Affirm, the buy now, pay later (BNPL) fintech company, made a strong debut in the stock market this week. The company's initial public offering (IPO) stock price was announced as $49 per share on January 19, 2021.

Prior to the IPO, Affirm was valued at $2.9 billion, according to PitchBook research. However, the company's valuation has since grown significantly. Affirm's most recent valuation, achieved after raising $500 million in venture capital in September, was over $4 billion.

With the IPO, Affirm has raised at least $1.2 billion, according to MarketWatch. The company's strong financial performance is evident in its annual gross merchandise value of $4.6 billion and its partnership with over 6,500 merchants, including major names like Shopify, Gucci, Bonobos, The RealReal, Peloton, and Macy's (which partnered with BNPL company Klarna ahead of the holidays last year).

Affirm's success can be attributed in part to the growing popularity of BNPL options. Cardify.ai's research suggests that the BNPL option is spurring sales, as Affirm claims. In fact, 48% of consumers surveyed by Cardify.ai say BNPL allows them to spend at least 10% to 20% more than they would with a credit card.

However, concerns about overspending persist. A slim majority of consumers surveyed by Cardify.ai were "somewhat or very concerned" that the payment method could lead them to spend more than they should.

Despite these concerns, the economic uncertainty experienced by consumers during the pandemic has benefited BNPL firms like Affirm. Buy now, pay later options have provided a flexible and attractive financing option for consumers of all income levels.

Affirm's IPO stock opened at $90.90 on Wednesday, indicating a strong investor appetite for the company. Analysts at JMP Securities raised Affirm's price target to between $41 and $44 per share on Monday.

Looking ahead, Affirm plans to continue expanding its partnerships across a broad range of industries. Since 2019, the company has added important partners from sectors such as sport and outdoor goods, furniture and home goods, travel and ticketing, apparel, accessories, consumer electronics, and jewelry.

Affirm currently has 3.6 million active consumers, according to its filing on Monday. As the company continues to grow and expand, it is poised to capitalise on the burgeoning BNPL market.