Trustly announces plan for Nasdaq Stockholm IPO

Swedish payments company Trustly has become the latest fintech start-up to announce its intention to list on the stock market, saying on Monday that it was seeking a valuation of about $9bn.

Trustly is seeking to list on Nasdaq in Stockholm in the coming weeks and is aiming to raise about SKr8bn ($930m) in fresh capital while its majority shareholder — Swedish private equity company Nordic Capital — will sell down its stake.

People familiar with the listing said it was targeting a valuation of about SKr70bn-SKr75bn ($8.2bn-$8.8bn) after weeks of discussions with potential investors.

“This is a way to make sure the company can stay independent. The company has reached the size where it started to become too big for a private environment,” chair Johan Tjarnberg told the Financial Times.

The announcement comes as investor interest in payments groups is surging, with Stripe in the US and Sweden’s Klarna, both unlisted, tripling their valuations in recent weeks.

Unlike most payment start-ups such as Klarna and Stripe that rely on card networks, Trustly has built up its own platform allowing consumers to pay directly from their bank accounts. It claims that by cutting out intermediaries such as card issuers and banks, it can reduce costs for merchants by up to a half.

Trustly, founded in 2008 and in which Nordic Capital bought a majority stake in 2018 at a €700m valuation, is touting itself as one of Europe’s fastest growing companies in terms of revenues and a start-up with solid profitability.

Tjarnberg said it planned to have a “rule of 80” for the next five years, under which the sum of its annual net revenue growth, and its underlying operating profit margin — both in percentage terms — would be more than 80 per cent.

Last year, Trustly processed $21bn of transactions and had revenues of SKr2bn, 40 per cent higher than in 2019. Its underlying earnings before interest, tax, depreciation and amortisation were SKr907m, given an adjusted ebitda margin of 46 per cent.

Chief executive Oscar Berglund told the FT there was considerable interest from younger consumers who did not want to pay with credit cards or buy now, pay later services such as Klarna.

He dismissed concerns that the EU’s move towards open banking — which opens up consumer accounts across the continent — would hurt Trustly, arguing that it had a proven platform and business model.

Tjarnberg, whose own payments start-up Bambora was sold by Nordic Capital to Ingenico for €1.5bn four years ago, said he had never seen such interest in the industry before. “There is a huge appetite for this account-to-account space . . . This is a way to control your own destiny,” he added.

Trustly is present throughout Europe but its biggest market will soon be the US, where it is enjoying huge growth. It said it would use the IPO proceeds to repay its credit facilities and redeem its outstanding preference shares.

Carnegie, Goldman Sachs, and JPMorgan are joint global co-ordinators while eight other banks are joint bookrunners.

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