SoftBank’s PayPay, a Japanese digital payments provider, is gearing up for a blockbuster U.S. initial public offering with a group of global investors including Qatar Holdings, Visa, and Abu Dhabi Investment Authority. These investors are reportedly preparing to inject over $200 million as cornerstone investors in the IPO, aiming for a valuation of up to $14 billion. This move could potentially mark the largest listing for a Japanese company on a U.S. stock exchange.
The sources familiar with the matter have requested anonymity as the information has not been publicly disclosed. They have also cautioned that no final commitment has been made, and discussions regarding the size, terms of potential cornerstone investments, and the valuation of the deal are still ongoing and subject to change.
PayPay is expected to list on the Nasdaq next month, as SoftBank aims to enhance the IPO’s appeal by bringing onboard cornerstone investors. Originally slated for December, the listing was delayed due to a prolonged U.S. government shutdown that impeded the regulatory process.
Despite requests for comment, PayPay, SoftBank, Qatar Holdings, Visa, and ADIA have not immediately responded. Reuters previously reported that SoftBank had been contemplating a U.S. listing for PayPay over two years ago.
The IPO of PayPay comes at a crucial juncture for SoftBank Group, which has been heavily investing in artificial intelligence (AI). With a commitment of $30 billion to OpenAI, SoftBank has been divesting assets, including a $5.8 billion stake in Nvidia and $4.8 billion of T-Mobile U.S. shares, to fund its AI ventures. The PayPay listing could provide a timely financial boost for the conglomerate, marking its first U.S. listing for a SoftBank-majority business since Arm Holdings.
Earlier this month, PayPay announced a partnership with Visa, aiming to expand its presence into the U.S. market. Jointly established by SoftBank and Yahoo Japan in 2018, PayPay has been instrumental in driving Japan’s digital transformation by incentivizing consumers to transition away from cash through rebates on transactions via its mobile app. With approximately 72 million registered users as of December 31, PayPay has rapidly evolved into one of Japan’s premier payment platforms within just over seven years of its inception.
As the IPO draws closer, the investment from global heavyweights like Qatar Holdings, Visa, and ADIA underscores the confidence in PayPay’s growth potential and the broader fintech landscape. The alliance between SoftBank’s PayPay and Visa signifies a strategic move towards international expansion, further solidifying PayPay’s position as a key player in the digital payments arena.
(Reporting by Echo Wang in New York; Editing by Rod Nickel)
