Technology companies continue to dominate the IPO scene, sending the market into overdrive after an equally busy 2020. Marqeta, Inc., a leading provider of digital payment infrastructure, is the latest to file for stock market debut. Having pioneered the concept of modern card issuing, the company looks to stay ahead of its peers in a market that is rapidly going digital.
Value Pegged at $15 Bln
Reports of Marqeta going public were doing the rounds for more than a year. In its last financing round, the California-based tech startup raised $150 million about a year ago and that valued it at $4.13 billion. The valuation is expected to go beyond $15 billion post-IPO. In a submission made to the Securities and Exchange Commission last week, the company revealed its intention to become a public entity, but the amount it plans to raise in the IPO is yet to be disclosed. Jason Gardner, Marqeta’s chief executive officer, holds a 14% stake in it.
In the regulatory filing, Marqeta said its annual revenues nearly doubled to $290.3 million last year. The strong top-line performance mainly reflects the demand growth spurred by the e-commerce boom during the pandemic. As a result, net loss narrowed to $47.7 million in fiscal 2020 from $58.2 million in the previous year.
Broad Customer Base
A wide range of customers, from financial service providers to e-commerce startups, use Marqeta’s platform for transforming their conventional payment systems into modern ones. The company offers technology for developing advanced fintech products which are more convenient and flexible. Debit/credit cards issued by many leading banks and e-commerce firms are powered by Marqeta’s technology.
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Given the rapid growth of on-demand delivery services since the onset of the pandemic, more companies are expected to use Marqeta’s services in the future. Interestingly, most of its existing customers are pandemic winners that thrive on the digitization spree and shopping boom. Marqeta’s stock has been an investors’ favorite in the private market. Meanwhile, it is believed that people’s spending patterns would change once the economy reopens fully, which in turn would influence the business of fintech companies.
API Prowess
Marqeta was founded by Gardner in 2010 and provides what is called the most advanced application programming interface (API) system, which enables enterprises to have a high level of control over their payment systems. The growing relevance of the technology has prompted other players like Stripe to enhance their API capabilities, setting the stage for stiff competition. Marqeta also competes with Fiserv (NASDAQ: FISV) and Dutch payments company Adyen. Its top customers include Instacart, Square, and DoorDash.
Read management/analysts’ comments on quartely reports
Marqeta’s services are designed to facilitate safe and error-free payment transfer, while also protecting customers from fraud. It offers both physical and virtual cards and is estimated to have issued more than 320 million cards to customers in 36 countries.