Andrei Zakharov

Director of Equity Research, IPOs

Algosun Global

Equity Bottom-Up

<ul>
<li>Fintech unicorn could report strong earnings results for FY Q3 2022. Total revenue increased by 54% year-over-year, and net loss narrowed to ~$55M for the reporting period.</li>
<li>
<a href="https://www.smartkarma.com/entities/affirm-holdings" target="_blank" data-smartkarma-citation="entities:31038:1" rel="noopener">Affirm Holdings (AFRM US)</a>  closed a $500M revolving ABS deal and added $2.5B in new funding capacity from various partners. Total funding capacity was ~$9B, marking a 55% YoY increase.  </li>
<li>Sovereign wealth fund GIC Singapore acquired ~$126 million worth of <a href="https://www.smartkarma.com/entities/affirm-holdings" target="_blank" data-smartkarma-citation="entities:31038:1" rel="noopener">Affirm Holdings (AFRM US)</a>  shares in April at an average of $33.00 per share.</li>
</ul>

Kyle Rudden

Alpha-Centric ESG Research

On 23 July, <a href="https://www.smartkarma.com/profiles/jason-yap-cfa" target="_blank" data-smartkarma-citation="accounts:24996" rel="noopener">Jason Yap</a> publised an excellent Insight titled <a href="https://www.smartkarma.com/insights/bnpl-industry-through-an-esg-lens" target="_blank" data-smartkarma-citation="insights:54887" rel="noopener">BNPL Industry Through an ESG Lens</a>. His knowledge of the "Buy Now, Pay Later" (BNPL) industry per se is well beyond mine, so I defer to his report for fundamentals on the industry and its companies.I do, however, have a few thoughts to add regarding ESG. Whilst Jason is spot-on for ESG issues he covered, I want to: 1) point out a potential ESG positive related to inclusive finance and sustainable development, and 2) expand on a major ESG negative associated with advertising and marketing.This is a deep dive into a few specific ESG issues, and hopefully complementary to Jason's work.

Vishal Hargovan

Global equities research in innovation & tech

Granite Bay Capital

An innovation focussed investment company

<ul>
<li>Affirm is a leading North American based BNPL provider that is well placed to grow aggressively over the next decade</li>
<li>Their advantages are threefold:</li>
</ul><ol>
<li>Excellence at technology and data which enables Affirm to win enterprise scale platforms</li>
<li>The ability to address transactions across the average order value scale hence address a larger proportion of credit card displacement TAM</li>
<li>Transparency and fairness with a commitment to never charge late fees appeals to merchants who share this value set / brand ethos</li>
</ol><ul><li>There will be multiple winners in the BNPL space and while Afterpay is our preferred pick, we believe Affirm’s strengths cannot be ignored and warrants strong consideration in a long portfolio</li></ul>

Equity Capital Markets

Founded in 2012 by PayPal co-founder Max Levchin, Affirm is mobile-first non-bank lender with innovative business model offering “Buy Now, Pay Later” (BNPL) lending products for consumers and effective commerce solutions for merchants. Peloton, Casper Sleep, Walmart, Gucci, The RealReal, Expedia and Priceline.com have merchant partnership agreements with Affirm. A number of such high traffic e-commerce platforms as Shopify, Magento, WooCommerce and BigCommerce can be integrated within the Affirm’s network seamlessly. Morgan Stanley, Goldman Sachs and Allen &amp; Company are lead underwriters on the upcoming IPO, that could come early next year. Affirm raised more than $1.5 billion in funding over 9 rounds, according to Pitchbook and Crunchbase. Their latest $500 million Series G round was led by GIC, Durable Capital Partners and brought Affirm’s private valuation to ~$5 billion.

<ul>
<li>Total revenue jumped to $361M, 77% YoY, and the number of active merchants reached a record of ~168,000 in FY Q2 2022.</li>
<li>The number of active consumers skyrocketed by 150% YoY to 11.2 million, and GMV more than doubled year-over-year in reporting period. </li>
<li>Growth of key operating and financial metrics was driven by the strong holiday season, adoption of Shop Pay Installments, and partnership with Amazon. </li>
</ul>

United States

Affirm Holdings, Inc. provides information technology solutions. The Company builds next generation platform for digital and mobile-first commerce. Affirm Holdings serves customers worldwide.

Affirm Holdings - AFRM US

Description