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SoftBank-backed PayPay jumps 19% in Nasdaq debut after $880m IPO
Shares of PayPay Corp. rose 19% in its Nasdaq debut after the Japan-based digital payments firm completed a US$879.8 million IPO.
American depositary receipts traded at US$18.10 as of 12:50 p.m. in New York, above the US$16 IPO price and below the marketed US$17 to US$20 range.
The listing values PayPay at about US$12.1 billion based on outstanding shares listed in its filings.
PayPay sold 31.1 million ADRs and an affiliate of SoftBank Vision Fund II sold 23.9 million, while Abu Dhabi Investment Authority, a unit of Qatar Investment Authority, and an arm of Visa Inc. agreed to buy as much as US$220 million in aggregate, according to the filings.
The company posted a profit of ¥103.3 billion (US$652.9 million) on ¥278.5 billion (US$1.76 billion) of revenue in the nine months ended December versus ¥29.0 billion (US$183.3 million) profit on ¥220.4 billion (US$1.39 billion) a year earlier, according to the filing.
PayPay began in 2018 as a joint venture with Paytm and had more than 72 million users in Japan as of December.
SoftBank Group was expected to control about 92% of voting rights after the offering, the filings show, and PayPay trades under the symbol PAYP on the Nasdaq Global Select Market.
🧠 Food for thought
Implications, context, and why it matters.
PayPay’s IPO focuses on cashing in while SoftBank Group keeps control
- PayPay’s roughly $12.1 billion valuation landed well below earlier expectations, after some reports floated a target above $20 billion 1.
- SoftBank Group chose a public listing to take some money off the table while keeping control, instead of pushing PayPay into a fully independent spin-off 2.
- PayPay goes beyond payments and now builds a broader financial ecosystem with loans, investments, and insurance.
The listing marks a move from growth-first to profit proof
- Markets now put less weight on user growth or gross merchandise value and more weight on a clear route to profit plus strong unit economics, meaning profit per customer or transaction 3.
- Other large private fintechs now face a higher bar, since public investors want earnings momentum along with market share.
- As PayPay grows credit products like “PayPay Atobarai” (a buy now, pay later product), it may borrow ideas from PayPal, which signed a two-year agreement where funds managed by Blue Owl Capital (an asset manager) will buy about $7 billion of PayPal’s U.S. “Pay in 4” BNPL (buy now, pay later) receivables to shift risk off PayPal’s balance sheet and free up capital 4.
Recent PayPay developments
🔗 Source: Bloomberg
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