Tag: ipo

  • 2 of Brazil’s biggest fintechs eye U.S. IPOs

    2 of Brazil’s biggest fintechs eye U.S. IPOs

    Across the globe, momentum is building for fintech IPOs as equities markets continue to surge, shrugging off economic uncertainty and geopolitical tension. Two of Brazil’s largest fintechs, Agibank and PicPay, are both planning to list on the New York Stock Exchange (NYSE), which attracted seven of the 10 largest IPOs in 2025.

    Among them were some of the biggest fintech firms in the world, Sweden’s Klarna and the U.S.’s Circle, the issuer of the USDC stablecoin. The deals were blockbusters, with Klarna raising $1.37 billion and Circle raising $1.01 billion. 

    The most successful Latin American fintech IPO thus far occurred in December 2021, when Warren Buffet-backed Brazilian digital banking giant Nubank listed on the NYSE. Since that market debut, Nubank’s share price has risen 45%. 

    Agibank filed for its IPO in mid-January. The Sao Paulo-based digital bank had planned to go public in Brazil in 2018, but chose instead to pursue a U.S. listing.

    Agibank is listing on the NYSE for access to deeper liquidity, global investor recognition, and to complete a strategic shift towards international digital banking. The move aims to capitalize on renewed investor interest in growth stocks after a lull in Brazilian IPOs. 

    The NYSE offers a larger pool of capital and better access to global investors than Brazil’s B3 exchange. Listing on a premier U.S. exchange enhances a company’s prestige and signals adherence to high regulatory standards, which is important to attract international investors. The move also represents the final step in Agibank’s transformation from a local lender into a global digital bank, a path pursued since a failed 2018 IPO attempt.

    Indeed, Brazilian IPO activity stopped altogether ​in 2022 due to a confluence of factors. These included market volatility, soaring interest rates, high inflation, and political uncertainty surrounding the upcoming presidential election. The risk-averse sentiment among investors discouraged companies from listing, leading to deal cancellations and postponements. 

    However, the year leading up to those listings had been one of the best ever for Brazilian IPO activity. IPO proceeds in 2021 totaled US$14.73 billion, a five-year high and almost double the US$8.47 billion raised in 2020. 

    “The four-year drought in Brazilian IPOs has built up the pipeline of companies ready to go public. It ⁠speaks volumes that they’re [Agibank] finally choosing to move forward now,” Matt Kennedy, a senior ‍strategist at Renaissance Capital, told Reuters. 

    The Brazilian digital financial platform PicPay also plans to list on the NYSE. PicPay said on Jan. 20 that it plans to raise US$400 million by offering 22.9 million shares at a price range of $16 to $19. At the midpoint of the proposed range, the company would command a fully diluted market value of $2.3 billion.

    PicPay, which is backed by Brazilian billionaire brothers Wesley and Joesley Batista’s J&F Investimentos, had previously pursued a U.S. listing in 2021. However, it put that plan on ice due to market headwinds.  

    Founded in 2012, PicPay has grown into Brazil’s second-largest digital bank by customer base after Nubank. PicPay serves about 66 million clients and offers a broad array of financial products from credit cards and loans to cryptocurrency trading and insurance.  

    In the first nine months of 2025, PicPay reported revenue of US$1.37 billion and net income of US$59 million. During this period, consumer deposits also reached US$5 billion.

    Successful IPOs on the NYSE by Agibank and PicPay would signal a vote of investor confidence in not just those two firms, but the broader Brazilian fintech market. Despite intensifying competition in Brazil, there remains significant room for fintechs to expand given the large population of the country (213 million) and incumbent weaknesses. Brazil can also act as a springboard for expansion into other Latin American markets, as Nubank has shown with its growth in Mexico and Colombia. 

  • U.S. Fintech IPOs Surge, Then Fizzle

    U.S. Fintech IPOs Surge, Then Fizzle

    After several years of a slow deal pipeline, U.S. fintech IPOs rebounded strongly in 2025. The concerns about inflation and high interest rates that had made investors risk-averse dissipated this year, despite ongoing macroeconomic uncertainty linked to the United States’ trade policy.

    2025 saw several long-awaited big-ticket deals come to fruition, including Chime, Circle, and Klarna. Deal flow has remained steady in the second half of the year, with Wealthtech making its market debut in December.  

    While the fintech IPO resurgence is welcome, it comes with a reality check. Public markets are less forgiving than their private counterparts—whose complex methodologies for calculating valuations often result in overly high expectations for startups. The process requires estimating future revenue/EBITDA multiples, a target return on investment (often 20-50% or more), and then discounting that future value back to the present. The assumptions around exit timing and target returns are subjective. 

    It is thus unsurprising that the share prices of Chime, Circle, and Klarna – all erstwhile high flyers in private markets – have fallen by double digits since their respective IPOs—though these are early days.

    Chime: Overreliance On Interchange Fees

    The June 2025 IPO of Chime, the biggest American digital bank, was a success. The San Francisco-based company priced its market debut at US$27 per share, above the expected range, raising US$700 million at a valuation of US$11.6 billion. Chime’s arrival in public markets was long anticipated and helped thaw an erstwhile tepid fintech IPO pipeline.

    Yet since then, Chime’s share price has fallen 28%. On the one hand, investors are likely reacting to a perception the stock was initially overvalued.

    On the other hand, Chime remains unprofitable. In the third quarter, revenue grew a brisk 29% to US$544 million, surpassing sales guidance, while its active member base grew 21% to 9.1 million. But Chime still lost US$55 million in the September quarter but posted a significant improvement in adjusted EBITDA of $29 million.

    With 22 million customers, Chime exceeds the size of U.S. online banks like SoFi, Dave, and MoneyLion, according to a 2024 Cornerstone Advisors survey. It has been successful tapping into a market where there has historically been limited competition given fragmentation, regulatory barriers, and hesitancy among American consumers to switch banks.

    The online lender relies on interchange fees for its core business, offering no-fee banking services, debit cards, and early paycheck access. These fees account for about 72% of revenue and are paid by merchants when customers use their Chime debit or credit cards.

    The company’s model, and that of its bank partners, is built on a regulatory exemption from the Durbin Amendment for banks under a certain asset threshold. This allows them to earn higher interchange fees than large, regulated banks.

    Yet the model is inherently risky because Chime is betting that it can continue to enjoy a regulatory exemption that may not last. The digital lender is much less diversified than traditional banks, which have revenue streams from lending, wealth management, and other fee-based services.

    Klarna’s BNPL Challenge

    After several years of delays, Klarna finally went public on the New York Stock Exchange (NYSE) in September at a valuation of US$15.1 billion, which is about 1/3 of what it was worth in private markets back in 2021. Although the fintech IPO itself was considered successful, the company’s share price has dropped 35% since September as investors worry about Klarna’s ability to generate sustained profits. 

    While Klarna’s third-quarter revenue reached a record US$903 million, its net loss widened to $95 million. Klarna says that it posted a loss mainly due to a US$235 million provision for credit losses, an accounting requirement tied to the rapid growth of its expanding Fair Financing product.

    The U.S. is a key growth area for Klarna, but its credit loss rates are higher there than in its core European markets. This is partly because Klarna must compete more directly with traditional credit cards in the U.S., where its primary users tend to be consumers who need more time to pay. 

    With its core BNPL product showing its limitations, Klarna has decided to hop on the stablecoin bandwagon as part of its diversification strategy. In a news release, Klarna explains its rationale for the issuance of KlarnaUSD, which is currently in a testing phase and will be available to the public on mainnet in 2026—likely in the middle of the year. Citing consultancy McKinsey, the Swedish fintech giant says that stablecoin transactions now exceed US$27 trillion a year and could overtake legacy payment networks before the end of the decade. 

    Launching a stablecoin does not fundamentally address the issues with Klarna’s current business model, but it could reduce the US$32.7 billion in cross-border fees the company pays, lowering its costs and allowing it to make faster payouts to merchants. 

    As Crypto Goes, So Does Circle 

    Speaking of stablecoins, Circle’s June IPO was a blockbuster fintech IPO, raising $1 billion at an $8 billion valuation. Shares surged 168% on its first day (June 5th) after pricing at $31 and opening at $69 on the NYSE. Investors rushed to snap up the shares of the USDC issuer, which benefited from optimism about stablecoin regulation (the GENIUS Act).

    Since then, the company’s shares have fallen about 50%. However, unlike Klarna and Chime, there is no fundamental shortcoming in Circle’s business model. Rather, investors are reacting to how lowered interest rates may impact Circle’s core revenue from USDC reserves. Lower interest rates will reduce the company’s income on cash and U.S. Treasuries.  

    In addition, the ultra-volatile crypto market is currently experiencing a downturn that Circle cannot escape. Macroeconomic jitters, year-end portfolio rebalancing, and high investor leverage leading to forced liquidations are all factors that have pushed crypto market capitalization to under $3 trillion, down from $4.3 trillion in October. 

    Auguring well for Circle is its strong third-quarter performance. The company’s net income tripled to $214 million, driven by increased USDC stablecoin circulation boosting reserve income, despite a lower return rate on those reserves. Total revenue reached $740 million, beating Wall Street estimates. Other highlights of the September quarter for Circle included a 60% rise in reserve income, strong service revenue growth, increased operating expenses from headcount, and an overall beat on earnings per share.

    What To Expect In 2026

    Looking ahead, the U.S. fintech IPO pipeline is likely to remain robust in 2026. One possible big-ticket deal next year is Airwallex. In mid-2024, CEO Jack Zhang said that the payments unicorn was aiming to be fintech IPO-ready by then. Airwallex’s financials have continuously improved over the past few years, and it recently closed a $330 million Series G funding round that valued it at $8 billion.

    When talking about fintech IPOs, one cannot help but think of payments infrastructure provider Stripe, whose valuation has reached an astonishing $106.7 billion in private markets. Yet unlike some of its peers, Stripe has not mooted any timeline for its market debut. Its leadership is focused on long-term growth, prefers controlled expansion, and does not feel pressured by market hype. With that in mind, we would not bet on a Stripe IPO next year.

    In contrast, a Revolut IPO next year would be unsurprising as one of the next fintech IPOs. The UK fintech unicorn recently reached a massive $75 billion valuation following a secondary share sale. Its financials are solid, having reported a net profit of $1 billion for the financial year ending December 31, 2024, on revenue of $4 billion. This marks the company’s fourth consecutive year of profitability.

    However, there is one major caveat: Revolut still does not have a full UK banking license. If that issue gets resolved in the first half of next year, it would instill confidence in investors, making a fintech IPO in the second half of the year more likely. If not, then Revolut is unlikely to go public in 2026. 

    In any case, if 2026 is anything like 2025, it will be a busy year. 

  • Why Stripe won’t commit to an IPO

    Why Stripe won’t commit to an IPO

    Stripe is one of the oldest fintech unicorns to remain a private company. Founded in 2010, Stripe is arguably past prime time to go public. Why the delay?

    It’s complicated. 

    With a valuation of $106.7 billion, the San Francisco and Dublin-headquartered company is one of the most successful payment startups of all time. Its seed round backers included Sequoia, Elon Musk and Peter Thiel – who all have records of making extraordinarily successful bets on nascent upstarts. 

    The company generated an estimated US$5.84 billion in revenue in 2025 and serves millions of businesses. It has expanded beyond payments to become a full-stack financial infrastructure platform. It has added services like subscription management, business setup, fraud prevention, lending and revenue/tax automation.  

    In 2024, Stripe reached profitability for the first time in a calendar year while total payment volume reached a massive US$1.4 trillion. In a Feb. 2025 news release, the company said that in each of the last six years, it had reinvested a higher proportion of its earnings in R&D “than any comparable company.” Cofounders Patrick and John Collison believe “this ability will prove particularly important in the coming years, as stablecoins, AI, and other forces reshape the landscape.”

    Unsurprisingly, Stripe is leaning into its AI capabilities as it seeks to capitalize on the massive expectations that investors and large corporations have for the technology. The payments firm emphasizes that it has invested in AI models “that are delivering significant revenue and performance uplifts for its users.” The payments company says that Hertz increased authorization rates by 4% when it moved its payments to Stripe, while Forbes saw a 23% boost in revenue with the payments startup managing its subscription payments. Carsharing marketplace Turo captured $114 million in additional annual revenue with Stripe’s Optimized Checkout Suite.


    While some startups would seek to use the momentum from AI-fueled growth to pave the way for an IPO, Stripe has shown no such inclination. Co-founders Patrick and John Collison have said that public companies are often suited for the “extract stage” rather than the “expand stage.” They say that staying private allows the company to focus on infrastructure building and long-term investments without the constant scrutiny and pressure to meet quarterly earnings per share (EPS) targets that come with being publicly traded. 

    At the same time, Stripe is profitable and cash-flow positive, so it does not need public market funding for capital. Unlike other fintech startups facing a financing squeeze, Stripe can finance its operations and acquisitions with existing cash and private funding rounds.

    Stripe also regularly arranges tender offers and secondary sales, allowing early investors and employees to sell their shares and get liquidity without the need for a public listing. This reduces a key incentive for an immediate IPO.

    Still, there are drawbacks to Stripe’s approach. On the one hand, tender offers and share buybacks may provide some liquidity to employees, this is a temporary fix and not a sustainable, long-term alternative to public market access.

    Secondly, kicking the can down the road indefinitely could result in a lower valuation when the company does eventually go public. Stripe may be the highest-flying payments startup today, but that may not be the case in three or five years. 

    Industry segments Stripe is targeting like AI and stablecoins may cool off in the coming years as investors realize their limitations. And Stripe is far from the first big payments fintech to undergo an overnight conversion to stablecoin believer – Sweden’s Klarna recently announced it plans to issue KlarnaUSD.

    While Stripe has hired major investment banks like Goldman Sachs and JPMorgan Chase to advise on future listing options, no official IPO date has been set. Instead of a traditional IPO, a direct listing may be a more likely route if Stripe does choose to go public in the future, since the company has no pressing need to raise more capital.  

  • Why the K Bank IPO is a crapshoot 

    Why the K Bank IPO is a crapshoot 

    South Korean digital lender K Bank has been talking about an IPO for years, literally. Since 2022, the company has twice aborted plans to go public. In early November, it formally filed for a third time, aiming to go public in the first half of 2026 on the Korea Stock Exchange (KOSPI). Both the company and investors are hoping this third time is the charm.

    In some ways, K Bank is stuck between a rock and a hard place. On the one hand, it is bound by a conditional rights offering from May 2021 that requires an IPO by July 2026. Investors, including Bain Capital and MBK Partners, injected 725 billion won into the South Korean digital lender at that time under the condition that if the IPO does not happen by July 2026, they can exercise their “drag-along rights” to sell their shares as well as those of top K Bank shareholder BC Card to recover their investment.

    While BC Card secured a “call option” back in 2021, which gives it the right to buy back the shares of the other K Bank investors first, doing so would be expensive. BC Card would probably have to pay 1 trillion won (almost 63% of its own capital) to cover the investors’ initial 725 billion won plus an 8% promised internal rate of return.

    Because of that promised 8% annual return, K Bank needs to achieve an IPO valuation of 4-5 trillion won, which is ambitious given its financials. K Bank posted a record quarterly profit of 68.2 billion won in the second quarter, but that figure fell to 19.2 billion won in the third quarter, down 48% year-on-year.  Net profit in the first nine months of the year also dropped by 15.5% year-on-year to 103.4 billion won.

    However, K Bank has performed well overall in recent years. Its 2024 net profit of 128.1 billion won was nearly 10 times as large as its 2023 profit of 12.8 billion won. It also had 12.74 million customers by the end of 2024.

    The Asia Business Daily noted that K-Bank’s target price-to-book ratio (PBR) for its desired IPO price is 2.5 times, well above the Kakao Bank PBR of 1.6 times. To reach its target IPO valuation of 4 trillion to 5 trillion won, “K Bank must prove its platform value exceeds that of Kakao Bank,” the newspaper said. “However, it remains uncertain whether the market will view K Bank as a platform company.”

    It is true that Kakao Bank achieved a whopping 18.5 trillion won IPO valuation when it listed on the KOSPI in November 2021, but that was at the height of a tech startup bubble that rapidly deflated after the company went public. Kakao Bank’s stock has lost almost 70% of its value since the IPO.

    Meanwhile, regulators are probing K Bank’s close ties with leading South Korean cryptocurrency exchange Upbit. K Banks has had a real-name account partnership with Upbit since 2020.  

    The financial authorities plan to closely review whether K Bank has thoroughly detailed investment risk factors, including its concentration of funds from Upbit, in the securities registration statement. Regulators are evaluating the possibility of a temporary liquidity issue at K Bank if the Upbit partnership were to end and what the bank’s contingency plan would be.

    Auguring well for K Bank is that it has significantly reduced its Upbit exposure in recent years. The partnership began in June 2020, and by 2021 K Bank was reliant on the cryptocurrency exchange for about half of its deposits. However, as of the second quarter this year, of Kbank’s total deposit balance of 26.8 trillion won, about 4.4 trillion won (16.42%) are Upbit escrow funds, compared to 50% in 2021.