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Fee Firms Approve IPO, with revenues doubling 12 months over 12 months

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Payment company Affirm filed its IPO prospectus with the Securities and Exchange Commission on Wednesday and plans to trade on the Nasdaq under the symbol "AFRM".

The San Francisco-based company, founded and run by PayPal co-founder Max Levchin, offers online installment loans. Affirm was one of the most popular startups in the field. Earlier this year, it announced a partnership with Shopify that will allow merchants to offer installment loans on products they sell, and it works with 6,500 merchants including Peloton, Expedia, and Walmart.

The eight-year-old company had sales of approximately $ 510 million for the fiscal year ended June 30, an increase of 93% over the previous year. For the three months ended September 30, revenue increased 98% year over year, while net losses decreased approximately half to $ 15.3 million.

Even if they don't charge interest, Affirm earns a fee for helping a trader sell. On the consumer side, they earn interest income from loans they buy from banking partners. Affirm also earns interest on some consumer loans. The rate they charge varies based on consumer creditworthiness, but often starts at 0%.

Affirm said gross merchandise volume – a key metric in the payments industry – was up 77% year over year. It has more than 6.5 million customers. Around 64% of the loans on Affirm this year were taken out by returning consumers.

The company plans to offer two classes of shares, which is increasingly common among Silicon Valley startups. Class A has one vote while Class B common shares have 15 votes. Max Levchin, the founder, chairman and managing director, will have voting control over the company.

Affirm is one of a wave of startups looking to go public before the end of the year. DoorDash and Airbnb both filed for an IPO within the last week.

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