Fintech Startup Affirm Plans To Go Public This Year At Up To $10B Valuation: WSJ

Financial technology startup Affirm Inc. is working with Goldman Sachs Group Inc GS to prepare for an initial public offering by the end of this year, the Wall Street Journal reported Thursday.

What Happened

The groundwork for taking the point-of-sale lender public is still at an early stage, and the company could also choose to merge itself with a special purpose acquisition company (SPAC) as a means of going public, according to the Journal's sources.

Affirm was last valued at $2.9 billion as of April 2019, according to data firm Pitchbook. Affirm is now targeting a valuation of more than $5 billion, even as high as $10 billion, people familiar with the matter told the Journal.

Why It Matters 

The San Francisco-based company enables shoppers, including customers of Walmart Inc WMT and Expedia Group Inc EXPE, to pay for goods in installments. 

Affirm CEO Max Levchin, who is also a co-founder of PayPal Holdings Inc PYPL,  said last week that it would begin offering similar installment plans to customers of Shopify Inc SHOP  later this year.

Among other fintech companies, SoftBank Group Corporation SFTBY-backed online insurer Lemonade Inc LMND raised $319 million in its IPO this month — but the IPO valued the fintech significantly below its pre-money valuation at $1.6 billion.

PayPal also offers point-of-sale loans and has seen its shares rise 78% year-till-date.