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Affirm CFO: We won't deal with retailers not 'aligned to our values'

·3-min read

Affirm Holdings (AFRM) hit the public markets on Wednesday, a week after a deadly Capitol Hill riot that drew widespread attention to tech companies billing themselves as “platforms.”

Shares of the payment platform, best known for its “buy now pay later” service, rose nearly 100% on its first day of trading, kicking off what’s likely to be another busy year of high-profile initial public offerings. The IPO comes at a time when tech at large is trying to distance itself from President Donald Trump after he egged on violent rioters seeking to overturn the election results.

Fellow payments processors PayPal and Stripe both halted payments for Trump’s campaign and supporters, raising the question of how Affirm will respond to the contentious political climate.

“We believe what happened, what you saw in Washington, D.C. last week was reprehensible. We condemn any attempt to overturn a fair and free election,” Affirm’s chief financial officer, Michael Linford, told Yahoo Finance Live on Wednesday.

But Linford also pointed out that Affirm — which provides small loans so customers can purchase items using installments — is an “open” platform. “That being said, any merchant isn’t aligned to our values, any partners unaligned to our values, we don't do business with them,” Linford said.

In the wake of last week’s riots, social media giants like Facebook (FB) and Twitter (TWTR) have booted Trump off the platforms where he amplified falsehoods about voter fraud.

The notion that tech platforms don’t bear responsibility for who they do business with or what content is posted on their sites has been squelched this year. Once insisting on a complete agnostic, objective approach in the name of free speech, social media platforms have created unintended consequences with misinformation, disinformation, and calls for violence running rampant.

SUN VALLEY, ID - JULY 10: Max Levchin, co-founder of PayPal and chief executive officer of financial technology company Affirm, arrives at the Sun Valley Resort for the annual Allen & Company Sun Valley Conference, July 10, 2018 in Sun Valley, Idaho. Every July, some of the world's wealthiest and most powerful business people in media, finance, technology and political spheres converge at the Sun Valley Resort for the exclusive week-long conference. (Photo by Drew Angerer/Getty Images)
SUN VALLEY, ID - JULY 10: Max Levchin, co-founder of PayPal and chief executive officer of financial technology company Affirm, arrives at the Sun Valley Resort for the annual Allen & Company Sun Valley Conference (Photo by Drew Angerer/Getty Images)

The word “platform” appears 356 times in the company’s S-1 published on Nov. 18, 2020. Affirm’s entire business model is predicated upon retail partners, with Peloton (PTON) making up 28% of its overall revenue. The company listed the runaway winner during the coronavirus pandemic as a key risk factor moving forward. While Affirm has no business in content creation or curation, its partners range from juggernauts like Walmart (WMT) and Wayfair (W) to small businesses on Shopify.

As of September 30, 2020, more than 6.2 million consumers have completed 17.3 million transactions with over 6,500 merchants using Affirm. The fintech company offers both 0% APR payment plans and interest-bearing loans (without compounding interest), generating revenue through merchants fees every time a customer uses Affirm to purchase anything from a couch to an exercise machine.

In the quarter ending Sept. 30, revenue grew 98% year-over-year, while net losses nearly halved to $15.3 million. Linford did not give guidance on a timeline to profitability.

Melody Hahm is Yahoo Finance’s West Coast correspondent, covering entrepreneurship, technology and culture. Follow her on Twitter @melodyhahm.

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