Become a billionaire thanks to millions of people who lost their jobs and did not have money to shop
Max Levchin – co-founder and former chief technology officer (CTO) of PayPal, is an entrepreneur who currently owns a fortune of more than 1 billion USD and is taking the role of CEO of Affirm. The nearly 10-year-old company is one of the world’s leading pre-paid post-paid startups, allowing customers to shop online and pay in monthly installments.
Levchin is the third founder in the prepaid postpaid field to become a billionaire during the Covid-19 pandemic. Thanks to holding 27.5 million shares of Affirm, last January, Levchin officially joined the ranks of world billionaires.
Previously, in July 2020, the two co-founders of Afterpay, Nick Molnar and Anthony Eisen, became billionaires. Molnar, then just 30 years old, was Australia’s youngest self-made billionaire.
As for Levchin, he left PayPal shortly after it was sold to eBay in 2002. A few years later, he founded Slide, which was acquired by Google in 2010 for $182 million. Besides, he is also an early investor in the review and comment aggregator platform Yelp.
According to Business Insider, many prepaid postpaid companies like Affirm or Afterpay have thrived during the pandemic due to the boom in e-commerce and the economic downturn. Instead of paying the full amount, with the apps above, cash-strapped consumers can buy products ranging from groceries to thousands of dollars worth of items and pay monthly installments.
A 2021 statistic shows that 21% of users of the prepaid postpaid form do not have enough money to make a one-time payment. Before the pandemic, 61% of people surveyed said they made less than $50,000 a year before taxes. By the time the epidemic broke out, that proportion had increased to 70%, and 6% of them lost their income completely.
The number of people who lost a part or their income skyrocketed is one of the main reasons contributing to the explosive growth of prepaid postpaid apps. Due to financial difficulties, this group has increased spending through services provided by leading companies such as Afterpay or Affirm.
According to the report, Affirm’s gross merchandise value (GMV) in the fourth quarter of 2021 reached $2.5 billion, up 106%. The company’s fiscal year 2021 GMV was $8.3 billion, up 79%.
In particular, the company that manufactures exercise equipment Peloton has always accounted for a high proportion since the outbreak of the pandemic because customers tend to practice more at home due to the impact of blockade measures.
In an interview, Levchin shared: “Instead of viewing goods in stores and ordering them to be delivered to their homes, consumers tend to buy online and receive them in-store. This is a huge turning point for the industry. Buy first, pay later.
In certain ways, I think during the pandemic, our service has become more important than ever to consumers. Many people fall into the situation of sudden job loss or income cut. Others are looking for ways to spend more in line with their ability to pay. I think they really benefit from Affirm. And we take great pride in helping them reduce the burden of paying in one go.”
Source: BIEN
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