EXCLUSIVE INTERVIEW: Max Levchin couldn’t get a car loan, so he founded Affirm. The buy now, pay later fintech raised $1.2 billion in its public markets debut.

Max Levchin Headshot

Summary List Placement

Affirm’s much-anticipated debut as a public company was greeted warmly by public investors on Wednesday. Shares soared as high as 110%, opening at $90.90 per share, far above the $49 initial price it set Tuesday evening. The San Francisco-based provider of installment loans raised $1.2 billion from the IPO.

Affirm was founded by serial entrepreneur Max Levchin in 2012. Prior to Affirm, Levchin launched over a dozen companies including Slide, a personal media-sharing service that he sold to Google for a reported $182 million, and Glow, a women’s reproductive health tech startup where he is still executive chairman today.

He is also an original member of the infamous PayPal mafia.

As the company’s single biggest shareholder, Levchin holds about 27.5 million shares that, at $90/share, are now worth well over $2 billion.

Just before trading started, Affirm CEO Max Levchin talked with Insider’s Candy Cheng and Shannen Balogh. Here’s a lightly edited version of the conversation:

Cheng: IPO days are meant for celebrating but it’s also a time for reflection. Tell us the story of how you came up with the idea for Affirm.

Levchin:  My story is kind of awful, but it’s actually true. So I got my first credit card on campus. It was like one of these free t-shirt and a credit card things. It was literally the age of balance transfers where people would be like, oh, I can do a 0% balance transfer and this bank will do this, you know, get another t-shirt.

And so all my friends were doing it in college and I was like, wow, like, this is basically a whole a new world of not having to pay your bills. 

I was two years off the boat. So I came to the USA at 16 and I was just turning 18 when this sort of began. And then like a half a year in, I was living the dream on campus with a per diem of $7 a day. And it was just fine, I just had to start a company.

And, the idea that you have to make minimum payments, it was just never really clear to me. It might have something to do with the fact that I was 18 and never taken a home economics class or anything like that. When my first company went bust, I was basically broke and my family was still kind of trying to set their feet down in America so I was not going to ask my parents to pay off my debt.

So I just talked to the collection people and told them I don’t have any money. In between my FICO score tanked, and I never really noticed, cause I wasn’t going to take another credit card out. And then literally after, I bought a kind of not-such-a-wonderful car right in the beginning of PayPal. But I didn’t realize that my credit was really bad. And someone at PayPal, like one of the first six people PayPal. had to co-sign my loan because …read more

Source:: Business Insider


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