The Afterpay Ltd (ASX: APT) share price has been on fire in the last few years.
Afterpay initially listed on 4 May 2016 for $1.00 per share to give it a market capitalisation of $125 million. Given its strong run of success, that now pales in comparison to what the Aussie payments group is worth today.
At the time of writing, Afterpay now boasts a market capitalisation of over $32 billion.
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Why has the Afterpay share price surged higher?
The Afterpay share price has now surged to $113 and is up more than 250% in the last year.
There's no doubt 2020 was a good year for shareholders, despite a slump in the March bear market. Afterpay shares plunged as low as $8.01 per share in March 2020, before rebounding strongly to close out the year.
This was largely due to a successful international expansion and a strong coronavirus response.
Australia contained COVID-19 as the federal government and Reserve Bank of Australia (RBA) rolled out billions in stimulus measures. That included a boost to JobSeeker and introduction of the JobKeeper scheme from the government.
For its part, the RBA drove interest rates lower by slashing rates and targeting the yield curve. More money in circulation, low interest rates reducing debt burdens, and restrictions on movement saw online retail sales surge across the country.
As a result, Afterpay was able to record strong sales numbers, despite initial investor concerns over increasing bad debts in what looked to be a looming recession.
The Afterpay share price continued to climb late in the year after a bumper FY20 result. Afterpay reported a 112% increase in underlying sales to $11.1 billion for the 12 months ended 30 June 2020. The buy now, pay later group also managed to retain customers and increase active customers to 9.9 million.
UK and USA customer numbers grew strongly as the group continued its steady diversification away from its Australian and New Zealand roots.
Total income increased 97% to $519.2 million as earnings before interest, tax, depreciation and amortisation (EBITDA) climbed 73% to $44.4 million.
That gave the Afterpay share price some strong momentum to close out the year at $118.00 per share — just shy of its record high.
Foolish takeaway
The Afterpay share price has been on fire in recent years but remains in a holding pattern in early 2021. All eyes will be on the Aussie fintech as it pushes forward with new initiatives in the new year.
