Plus, Petco IPO raises $864 million as retailer returns to market and Poshmark prices its IPO above the marketed range.

(Bloomberg)—Affirm Holdings Inc. almost doubled in its public market debut, the latest multibillion-dollar technology company to start trading significantly higher than its initial public offering price.

Shares of the San Francisco-based company, which provides installment loans to online shoppers, closed up 98% to $97.24 in New York trading after rising as much as 110% earlier Wednesday. The company sold 24.6 million shares at $49 each in Tuesday’s IPO to raise $1.2 billion, pricing the stock above a range that had already been increased.

Affirm closed Wednesday with a market value of more than $23 billion. The company has a fully diluted valuation of almost $30 billion, including options and restricted stock units, according to Bloomberg calculations.

Airbnb Inc. and DoorDash Inc. each soared above their IPO prices when they went public in December, showing the appetite for tech listingsespecially among retail investors — and raising questions about how the deals were priced. Airbnb currently trades about 150% higher than its listing at a market value of more than $100 billion, while DoorDash is up about 94%.

Founded in 2017 by PayPal Holdings Inc.’s co-founder Max Levchin, Affirm counts Singapore’s GIC Pte, Khosla Ventures, Founders Fund, Lightspeed Venture Partners and Shopify Inc. among its investors. Levchin remains the biggest shareholder after the listing.

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Levchin, Affirm’s chairman and chief executive officer, said the company has just renewed its alliance with its biggest merchant partner, home exercise company Peloton Interactive Inc., No. 120 in the 2020 Digital Commerce 360 Top 1000.

“Peloton has been a great partner to us,” Levchin said. “We’re both good to each other, is one way to put it.”

Affirm sees itself as possibly expanding through acquisitions, Levchin added.

For the third quarter, Affirm had a net loss of $15 million on revenue of $174 million, compared with a loss of $31 million on revenue of $88 million during the same period in 2019, according to its filing.

Peloton was by far Affirm’s most important merchant partner, accounting for 30% of its total revenue in the third quarter. Its top 10 merchants including Peloton produced about 37% of Affirm’s revenue during the period, creating the risk its business could be adversely affected by the loss of any of those partners, according to the filing.

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More than 6,500 merchants use Affirm’s platform, according to its prospectus.

Lightspeed partner Jeremy Liew, an Affirm board member, said that, while the company’s success is bolstered by Peloton’s for the moment, the business reflects its broad merchant base.

“It’s almost like an index with the health of e-commerce,” Liew said. “Over time we’re going to see other companies do well and they’ll become increasingly important for Affirm because they’re increasingly important for e-commerce.”

Liew added that the IPO was priced to make it attractive for groups that were going to be long-term investors.

Affirm’s offering was led by Morgan Stanley, Goldman Sachs Group Inc. and Allen & Co. Its shares are trading on the Nasdaq Global Select Market under the symbol AFRM.

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Petco IPO raises $864 million as retailer returns to market

The owner of the animal supply chain store Petco raised $864 million in an initial public offering, returning the retailer to the public market 15 years after it was taken private.

The company, which is changing its name to Petco Health and Wellness Co. (No. 107) in conjunction with the listing, sold 48 million shares for $18 each, according to a statement. The private equity-backed company had marketed the shares for $14 to $17.

After the IPO, Petco will continue to be controlled by its current owners, which include CVC Capital Partners and Canada Pension Plan Investment Board. They acquired Petco for $4.6 billion from TPG and Leonard Green in 2016, a decade after those two firms took Petco private.

San Diego-based Petco has grappled with challenges including rising competition and disruptions to consumer spending amid the coronavirus pandemic.

Petco operates about 1,500 stores across the U.S., Puerto Rico and Mexico, according to its filings. Some offer pet care services, veterinary advice and vaccination clinics, and the company also has a digital health service.

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Petco had a net loss of $25 million on net sales of $3.58 billion for the 39-week period ended Oct. 31, according to its filings.

Dog products company Barkbox Inc. is going public through a merger with the blank-check company Northern Star Acquisition Corp. The transaction, announced in December, values Barkbox at about $1.6 billion based on enterprise value, according to a statement.

The Petco offering is being led by Goldman Sachs Group Inc. and Bank of America Corp. The shares are expected to begin trading Thursday on the Nasdaq Global Select Market under the symbol WOOF.

Poshmark prices IPO above the marketed range

The company sold 6.6 million shares for $42 each Wednesday, according to a statement confirming an earlier report by Bloomberg News. Poshmark had marketed the shares for $35 to $39.

Redwood City, California-based Poshmark is valued at about $3.5 billion on a fully diluted basis, including options and restricted stock units.

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The Poshmark IPO follows that of Affirm Holdings Inc., the online consumer lender that almost doubled on its trading debut Wednesday after raising $1.2 billion in its IPO.

PET Acquisition LLC, the owner of the Petco retail chain, exceeded its marketed range to raise $864 million in its IPO on Wednesday. The company, which is changing its name to Petco Health and Wellness Co., is backed by investors including the private equity firm CVC Capital Partners.

Poshmark’s listing is being led by Morgan Stanley, Goldman Sachs Group Inc. and Barclays Plc. The shares are expected to begin trading Thursday on the Nasdaq Global Select Market under the symbol POSH.

Poshmark is No. 29 in the ranking of Digital Commerce 360 Top 100 Online Marketplaces.

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