PayPay, SoftBank raise US$879.8 million in payments firm’s US IPO

[NEW YORK] PayPay and an arm of SoftBank raised US$879.8 million in the digital payments firm’s US initial public offering (IPO), in the biggest listing for a Japanese company on a US stock exchange in a decade.

Tokyo-based PayPay priced the IPO of American depositary receipts (ADRs) at US$16 apiece, according to a statement, below a marketed range of US$17 to US$20. The ADRs each represent one common share.

The company sold 31.1 million ADRs, while an affiliate of SoftBank Vision Fund II, an investment arm of the Japanese conglomerate, sold 23.9 million ADRs, the statement showed. PayPay guided investors that it would price the offering at US$16 each, sources familiar with the matter said earlier.

At the IPO price, PayPay has a market value of about US$10.7 billion based on the outstanding shares listed in its filings with the US Securities and Exchange Commission.

PayPay had delayed the start of formal marketing amid uncertainty over conflict in the Middle East. The IPO attracted institutional investor orders for multiple times the available ADRs ahead of pricing.

Abu Dhabi Investment Authority and a unit of Qatar Investment Authority, along with an arm of payments giant Visa, agreed to buy as much as US$220 million worth of shares in aggregate, the filings showed. The IPO includes a public offering without listing in Japan of about 8.7 million ADRs offered by Mizuho Financial Group at the same price as the US offering.

PayPay’s IPO is the largest by a Japanese company debuting in the US since mobile messaging service Line raised US$1.3 billion in a listing in Tokyo and New York in 2016, according to data compiled by Bloomberg.

The business had a profit of 103.3 billion yen (S$829 million) on 278.5 billion yen revenue in the nine months ended December versus a profit of 28.96 billion yen on revenue of 220.4 billion yen in the same period a year earlier, according to the filing.

PayPay originated in 2018 as a joint venture with Vision Fund-backed Indian payments company Paytm. Shortly after launch, the company zoomed past Rakuten Group’s Rakuten Pay in capturing users, thanks to heavy marketing, aggressive subsidies and SoftBank’s support in signing on merchants around Japan. As at December, the number of PayPay users exceeded 72 million in a country of roughly 123 million.

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QR codes accounted for 9.6 per cent of Japan’s total cashless transactions in 2024, up from 0.2 per cent in 2018, according to the Economy Ministry. The share held by credit cards stood at 82.9 per cent, but that portion has been shrinking.

PayPay, which is majority-owned by SoftBank Group and SoftBank, has been stepping up efforts to expand overseas ahead of the global offering. PayPay last year began making its service accessible in over two million shops in South Korea for Japanese customers. In February, the company announced a partnership with Visa to explore opportunities in the US.

The IPO comes as SoftBank monetises more assets to finance new investments in artificial intelligence. The tech investor said that it divested nearly US$13 billion worth of T-Mobile US shares between June and December alone.

SoftBank Group is expected to control about 92 per cent of the votes in PayPay following the IPO, an earlier filing shows.

The offering was led by Goldman Sachs, JPMorgan Chase, Mizuho and Morgan Stanley. The company is expected to debut on Thursday (Mar 12) on the Nasdaq Global Select Market under the symbol PAYP. BLOOMBERG