The San Francisco-based pay-by-installment firm granted the Ottawa-based e-commerce company a warrant in July to buy almost 20.3 million shares at a penny each, per a prospectus filed with the U.S. Securities and Exchange Commission. Shopify exercised just over five million of those options in September. (The Logic)

Talking point: If Shopify exercises its entire allotment—half of which is for Class B shares, with significantly more voting power than those being issued to new investors in the IPO—it will have a bigger stake than longtime investors Lightspeed Venture Partners, Founders Fund and Khosla Ventures. The deal also helps explain the US$133-million unrealized gain on an equity investment Shopify reported in the third quarter. In exchange for the warrant, Affirm gets the chance to grow its customer base. It’s got an initial three years of exclusivity to make the fixed-term installment loans that U.S. Shopify merchants offer their shoppers. That’s a big market. Just over half of the e-commerce platform’s million-plus clients are in the U.S., and its Shop Pay service, through which Affirm offers its product, had 60 million users worldwide at the end of September. Affirm expects new merchants’ shoppers will be taking out shorter-term, lower-value credit, diversifying its business—buyers of $3,000 bikes from Peloton, much in demand during the pandemic, contributed 30 per cent of Affirm’s revenue in the third quarter.