The floodgates are definitely open for IPOs in the tech world right now, and the latest is coming out of Europe. Adyen, a company that powers payments for large and smaller e-commerce merchants and others, has said that it plans to publicly list on the Euronext Amsterdam exchange, keeping the company’s financial future close to where Adyen itself was founded and is based rather than taking it to the US markets as some other European unicorns, like Spotify, have opted to do.
The news comes in the wake of reports that it was planning to announce its plans this week.
Adyen’s offering prospectus does not detail how much it plans to raise, or what sort of valuation it’s likely to reach in a public listing. It confirmed will be selling up to 15 percent of its shares, valued at a valuation of between €6 billion and €9 billion ($7 billion – $11 billion) after the IPO. We have reached out to the company for further detail on that front.
For some context, Adyen last confirmed its valuation publicly back in 2015, when it raised funding from Iconiq, the investment firm that manages funds from Mark Zuckerberg’s family and other high-net-worth tech leaders, at a $2.3 billion valuation. In other words, it’s a big jump, reflecting the company’s growth over the last couple of years.
Adyen to date has raised $266 million in outside funding, with other investors including Index (its largest shareholder), Felicis, Temasek and General Atlantic.
Adyen said in the prospectus that its net revenues for the year that ended December 2017 were €218 million, up 38 percent on 2016, with total processed volumes of €108 billion in 2017 up from €66 billion in 2016, or 63 percent growth. It’s also profitable, with an EBITDA of €99 million, or a margin of 45.5 percent. Net income for Q1 was €24.1 million, up €10 million over the same period a year before.
Adyen has also clinched some key deals that point to continuing growth. Competing against the likes of Worldpay and PayPal, Adyen stole a march on the latter when it moved in to become the primary payments provider to eBay. After the former parent of PayPal spun out the company, it subsequently put the deal out for tender and Adyen clinched it. (PayPal will still remain an option, but will not be the main provider.)
“We feel that we are still in the early stages of a remarkable journey. Our focus remains on building new functionality and on helping our merchants grow,” Pieter van der Does, the CEO and co-founder of Adyen, said in a statement. “This offering provides us with the freedom to keep building the company, while offering our shareholders a path to liquidity. Adyen will remain a company that is driven by a long-term vision and strategy.”
Other key customers include Uber (itself still growing like a weed, despite its many setbacks and divestments), Netflix, Facebook, Spotify, Etsy, Vodafone, Sephora, Tory Burch, L’Oréal and booking.com — underscoring how the company’s own growth is mirroring the increasing ubiquity and acceptance of digital payments.
The other area to watch and note with Adyen is that it’s looking to extend beyond basic payment processing technology: the company picked up a banking license at the end of last year and plans to expand in settlement services that would have previously been provided by banks. This will also help it grow its margins and overall revenues.
It will also be worth watching to see what happens next: last week, just one week after another European payments company iZettle announced its own IPO plans, it got snapped up by PayPal. I can’t help but wonder if someone is waiting in the wings again, and also what sort of a role Adyen’s bullish move played in PayPal’s own deal to secure growth.