SoftBank Could Launch PayPay’s US IPO in Q4

SoftBank reportedly selected four banks to help it prepare for a potential initial public offering (IPO) in the United States for its Japanese payments app business, PayPay.

Goldman Sachs, JPMorgan Chase, Mizuho Financial Group and Morgan Stanley are helping to lead the listing, which could take place as soon as the fourth quarter and raise over $2 billion, Reuters reported Monday (Aug. 11), citing unnamed sources.

The timing and other factors could change, according to the report.

SoftBank did not immediately reply to PYMNTS’ request for comment.

In an earlier U.S. listing of a company in which SoftBank had a majority stake, chip designer Arm Holdings went public in 2023 at a valuation of $54.5 billion, the report said.

SoftBank said in a first-quarter earnings results presentation released Thursday (Aug. 7) that PayPay is one of the late-stage portfolio companies in its pipeline for future public listings.

It added that the IPO preparations for PayPay are “progressing well.”

PayPay was launched in October 2018 and now has 70 million registered users, which is equivalent to more than 1 in 2 people in Japan and about 2 out of 3 smartphone users in the country, according to the presentation.

SoftBank said in May 2021 that it was seeking an IPO for PayPay. At that time, PayPay had attracted 36 million users in its first three years, with the help of SoftBank’s sales network and rebates, and was contributing to a push for a cashless economy in Japan, where cash had traditionally been king.

In July 2023, it was reported that SoftBank was considering a U.S. listing for PayPay and that the potential listing was driven by New York’s greater potential for higher valuations for tech companies in comparison to Tokyo.

It was reported in July that investment banks Evercore and Stifel Financial expect IPOs to pick up in the second half of the year, with heightened activity in the markets driven by a reduction in volatility and an easing of regulations by the White House.

IPOs remained scarce during the first half of the year, with just nine private equity-backed IPOs during that period in Europe and the U.S., compared to 116 in the same period in 2021.