The founders of PayPal are often called the PayPal Mafia and for good reason. Not only did they fund wildly successful PayPal, but they have all gone on to do much bigger work. Elon Musk is the founder of Tesla and SpaceX and currently the world’s wealthiest person. Peter Thiel became an influential venture capitalist. Luke Nosak is also a successful venture capitalist. Reid Hoffman is the founder of LinkedIn. All four men are multi-billionaires. Now the fifth founder of PayPal, Max Levchin has joined him in the multi-billionaire club.
Levchin is the founder of online lender Affirm. He founded the company in 2012. It is just an IPO, but we will meet in a moment. The IPO prospectus revealed that the shares were expected to sell for $ 33 to $ 38 each. At $ 38 per share, Levchin’s 27.5 million shares would be valued at more than $ 1 billion, and Affirm would be valued at approximately $ 9.2 billion. Levchin shares hold 11% of the total outstanding shares.
Affirm made its IPO on Wednesday, January 13 and skyrocketed 110% in its first day trading, to a value of $ 1.2 billion. Affirm’s shares blew their way to an upward projection of $ 38 and started at $ 49 per share. Prior to the IPO, Affirm raised the estimated share price from $ 33 to $ 38 to $ 41 to $ 44. Affirm now has a market cap of $ 24 billion.
Levchin was born in 1975 in Kiev, Ukraine to a Jewish family. He moved to the US in 1991 and settled in Chicago. He was a sick child with respiratory problems and doctors did not give him a good prognosis to survive to adulthood. His parents and grandparents thought that taking a wind instrument would help him improve his lung capacity, so Max learned to play the clarinet. He attended the University of Illinois at Urbana-Champaign. While in college, Levchin founded SponsorNet Media with fellow students Luke Nozak and Scott Bannister. Levchin earned a bachelor’s degree in computer science in 1997. After college he moved to Silicon Valley and Luke Nosek introduced him to Peter Thiel.
A year after graduating from college, Levchin and Peter Thiel founded Fieldlink. The company allowed users to securely store encrypted data on their PalmPilots and other handheld PDA devices that were not, before, digital wallets. He changed the name of the company to Confinity, which then evolved into PayPal, although that name was not adopted until 2001. PayPal went public in February 2002. At the time of the IPO, Levchin had a 2.3% stake in PayPal, valued at $ 34 million. . Levchin served as the company’s CTO and was known for his work on PayPal’s anti-fraud efforts. He is also the co-creator of the Gozebeck-Levchin test, one of the first implementations of what we know as today’s captcha. Levich left PayPal a few years after it was acquired by eBay.
In 2004, he founded Slide, a media-sharing service for MySpace and Facebook. Google purchased Slide in August 2010 for $ 182 million. Following the acquisition, Levchin joined Google as vice president of engineering. Google almost closed the slide the day after it was received and Levchin resigned. Levchin founded HVF in 2011 to explore and fund projects in the field of leveraging data. In early 2012 the FV split from HVF.
Affirm was founded with Nathan Gettings of Palantir Technologies and Jeff Jeffitz of First Data. Confirmation offers installments to consumers who are available at the point of sale, such as an e-commerce website or brick and mortar store. Levchin is the CEO of the company. Affirm has grown rapidly in the last few years. They partnered with online retailers to give customers a loan when they checked out. Consumers can then repay the loan in three, six or 12 months. Revenue nearly doubled to $ 509.5 million in the fiscal year ending in June. Peloton is Affirm’s largest partner and accounts for 28% of its 2020 revenue. The peloton accounted for 30% of Affirm’s revenue in the previous quarter as people stuck at home broke home exercise equipment more than ever due to the coronovirus epidemic. Affir had a market cap of $ 10 billion in its IPO.
The term PayPal Mafia has been floating around for nearly 15 years as the company’s founders and early employees introduced YouTube, LinkedIn, Yelp, SpaceX, Tesla and Palantir. Peter Thiel first became a billionaire from his initial investment in Facebook. He has total assets of $ 7 billion. Reid Hoffman co-founded LinkedIn in 2002 and sold it to Microsoft in 2016 for $ 27 billion. He has a net worth of $ 3 billion. Of course, Elon Musk is the man behind Tesla and SpaceX and the current richest person in the world with a net worth of $ 210 billion. Now Max Levchin has also joined his former PayPal co-founders as a multi-billionaire!