Affirm targets up to $38 per share in IPO, pushing its valuation above $9B

Today Affirm, a fintech startup that offers payment options to e-commerce customers, released a new S-1/A filing. The new document follows a late-December filing of a similar nature, though that update focused on changing the language of Affirm’s reported results, tweaking its language to remove some adjusted metrics and hewing closer to generally accepted accounting principles, or GAAP.

The company’s more recent filing details what could be its first IPO price interval, indicating that Affirm may price its shares between $33 and $38 per share in its IPO. If Affirm raises its estimates, expect that price range to tighten.

Let’s calculate Affirm’s valuation marks at its new price range before digging into what we think of the company’s estimated worth against its most recent performance.

Valuation

There are two ways to calculate a company’s IPO valuation. The first takes into account only shares that will exist after the offering. The second, the so-called diluted valuation, takes into account shares that are available for exercise or conversion, but have yet to be. To avoid choosing sides today, we’ll calculate both.

The first, simple valuation is a doddle to tally:

• Affirm shares outstanding post-IPO, including its underwriters’ option: 246,436,771.
• Affirm IPO price interval: $33 to $38 per share.
• Affirm simple IPO valuation range: $8.1 billion to $9.4 billion.

Affirm’s fully diluted valuation involves a larger share count, so it generates larger results. Doing our own math, here’s how it shakes out (Bloomberg came up with slightly different numbers):

• Affirm fully diluted shares outstanding post-IPO, including its underwriters’ option: 318,865,2461.
• Affirm IPO price interval: $33 to $38 per share.
• Affirm fully diluted IPO valuation range: $10.5 billion to $12.1 billion.

At the time of its April, 2019 Series F, Affirm was worth $2.9 billion after the capital was raised, according to PitchBook. The company also raised a $500 million Series G in September of 2020. That final round sold shares at $19.93 apiece, along with some convertible notes, per today’s filing; investors in that transaction are set to do very well in under a year.

Those who put money in even earlier will do even better.

Do those numbers make sense?