🎉 We've launched our new mobile app! Learn about it here

What An Adyen-ture


Image source: Unsplash.com

What's going on?

On Thursday, Adyen – a Dutch company that helps companies including Netflix and Uber process payments – announced its plans for an Initial Public Offering (IPO). The company could be worth as much as $11 billion.

What does this mean?

Adyen works directly with credit card companies like MasterCard – moving money from customers’ card payments into businesses’ coffers all around the world. It’s helped major companies to efficiently handle cross-border and multi-currency payments and recently gained a license to become an acquiring bank in Europe, meaning that it can process payments almost instantly and not wait for large banks.

With a growing number of classy clients – plus soaring revenue and profit margins – Adyen’s targeting a share price that will value the company between $7-11 billion (tweet this). At the low end, it’s nearly three times as high as the company was valued in a 2015 fundraising round.

Why should I care?

For markets: You can go your own way…

In an IPO, companies generally rely on investment banks to manage how the company’s shares will be sold and distributed to investors. A company that bucked this trend is Spotify, which opted for a direct listing of its stock (i.e. no investment banks). Adyen’s route is more traditional – but like Spotify, it won’t be issuing new stock to raise funds for the firm. Adyen’s already profitable and says it only needs to spend some 5% of its annual profits to grow the business sustainably.

The bigger picture: The payments sector’s having a moment.

PayPal – one of Adyen’s biggest competitors – last week agreed to acquire Sweden’s iZettle, a startup that manages card payments for small businesses, for $2.2 billion. However, this all looks pretty small fry when compared with China’s main digital payments processor, Ant Financial – which just completed a fundraising round valuing the company at $150 billion. It may be a prelude to Ant’s own IPO.

Originally posted as part of the Finimize daily email.

The top 2 financial news stories in 3 minutes. Join over 400,000 Finimizers

Read next

Turkey Gets Stuffed (Again)

Sign up to Finimize

Get the two most important global financial news stories each day. Sent at midnight UK time.

Get started with one email a day

The top financial news stories in 3 minutes.