The 'buy now, pay later' boom is minting a new class of billionaires

  • Paypal cofounder Max Levchin is set to become a billionaire with the IPO of Affirm, which lets customers make online purchases in installments.
  • He would be the third entrepreneur in the "buy now, pay later" industry to join the three-comma club during the pandemic, following the Australian cofounders of Afterpay, Nick Molnar, and Anthony Eisen.
  • Sebastian Siemiatkowski, CEO and cofounder of $11 billion firm Afterpay, is close to billionaire status with his reported minority stake.
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Max Levchin, cofounder and former CTO of PayPal, is primed to reach billionaire status with the upcoming IPO of his fintech company Affirm. The eight-year-old firm is one of the top "buy now, pay later" startups, which allow customers to make online purchases in installments. 

Levchin, 45, owns 27.5 million shares of Affirm, according to its S-1 released Tuesday, worth $1.05 billion if the company lists at $38, the top end of its price range.

Levchin could become the third founder in the BNPL space to reach billionaire status during the pandemic. This past July, Afterpay cofounders Nick Molnar and Anthony Eisen became billionaires with their respective 20.5 million shares. Molnar, only 30 years old at the time, is Australia's youngest self-made billionaire. Their stakes are each worth 2.3 billion AUD ($1.8 billion) based off Afterpay's stock price on January 6. The Australian firm's stock has risen more than 250% since March, and it hit 5 million active shoppers in the US in May, only two years after entering the market.

This won't be Levchin's first windfall. He left PayPal shortly after it sold to eBay in 2002 and a few years later founded Slide, a billings company. Google acquired Slide for a reported $182 million in 2010. Levchin was also an early investor in Yelp and owned 2.7 million shares (worth $87 million today) as of his most recent SEC filing, dated September 2016.

Many BNPL firms have thrived during the pandemic due to a boom in ecommerce and the economic recession. Consumers strapped for cash can use BNPL to purchase products, whether it's a $1,000 Patagonia fleece or groceries, that they couldn't afford otherwise.

An analysis conducted by, which uses data from mobile rewards platform Drop, found that 21% of BNPL users did not have enough funds to cover the full price of their purchase. Before the pandemic, 61% made less than $50,000 pretax; that has since jumped to 70%, with 6% reporting no income at all. Those who lost part or all of their income increased their BNPL spending the most.

Affirm's revenue for the fiscal year ending June 30 surged to $509.5 million from $264.4 million the year prior, with Peloton accounting for about 28% of its total revenue. Affirm's S-1 acknowledged that losing Peloton as a partner would "materially and adversely" impact its financial condition and future prospects. Peloton has seen a 172% sales increase in its most recent quarter, thanks to homebound customers wanting to exercise at home. It is uncertain if this trend will last, but for now, shoppers wary of in-store browsing are boosting Peloton and Affirm's revenue.

"It will become a buy online, pick up in-store model, as opposed to explore offline and then order from home, which is an exact flip to where the industry was trending," Levchin told Insider's Shannen Balogh in April.

Sebastian Siemiatkowski, the CEO and cofounder of Klarna, is also on the cusp of billionaire status. The Swedish lending platform was valued at $10.65 billion in September after raising $650 million from Silver Lake, Singapore's sovereign wealth fund GIC, and others. The 39-year-old owns an 8.1% stake in Klarna, according to a recent profile by TechCrunch, which would put his stake at $863 million. He has stated that Klarna could go public in the next one to two years.

Klarna has 90 million customers worldwide and topped 11 million users in the US in November. It has added a slew of brick-and-mortar partnerships during the pandemic, including a five-year contract with Macy's inked in October. 

"To some degree, the threat from these guys in Seattle to the whole industry, I think, is quite fun," Siemiatkowski told Business Insider in October, referring to ecommerce giant Amazon. "It's creating this sense of urgency and a willingness to experiment and be more open."

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