After announcing its intention to go public in May, today Adyen published more details with the finances filled in. The Netherlands-based payments startup — which competes against the likes of PayPal and Stripe to power payment services both to online and physical retailers — said that it will be raising between €922 million and €947 million (approximately $1 billion and $1.1 billion) June 5-12, before it opens for trading on the Euronext Amsterdam on June 13 trading as “ADYEN.” If all goes to plan, the sale will give Adyen a market capitalization of between €6.5 billion and €7.1 billion ($7.6 billion – $8.3 billion).
The 4,189,102 shares being sold valued at €220 and €240 per share represent 12.7 percent of the company’s issued and operating share capital, Adyen said.
These numbers reflect the generally strong climate for tech IPOs at the moment: when Adyen first announced its IPO the company confirmed that it was planning on selling around 15 percent of its shares for a valuation of between €6 billion and €9 billion ($7 billion – $11 billion) after the IPO.
The IPO also speaks to the strength of Adyen’s business and business prospects.
Adyen says that for the year ended December 31, 2017, it generated net revenue of €218 million, a rise of 38 percent over the year before, with EBITDA of €99 million, giving it an EBITDA margin of 45.5 percent. Processed volumes on its platform were €108 billion in the period, compared to just €66 billion in 2016, up 63 percent. The company counts Uber and Netflix among its customers, and earlier this year it picked up a key client in the form of eBay, which is swapping out spun-out business PayPal as its primary payment provider.
(Sidenote: since eBay will still be working with PayPal on a non-exclusive basis, a report this week alleged that eBay stands to gain a share in Adyen of up to five percent if chooses to route a substantial portion of its transactions through the Dutch company. There is nothing about this arrangement in the Adyen’s prospectus.)
“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,” said Adyen’s CEO and co-founder Pieter van der Does, 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”.
Indeed, the rise in e-commerce — where some or all of a purchase by a customer is made either online or by mobile — has been a swift one globally, and Adyen has been one of the companies riding that wave by helping to reduce the friction between a company choosing to take payments online, and actually being able to do it.
Nevertheless, there is still a long way to go before e-commerce is ubiquitous. Figures from the U.S. Census for the first quarter of 2018 show that e-commerce sales accounted for less than 10 percent of all sales in the U.S., and the U.S. is one of the more mature markets for digital transactions, meaning the opportunity for growth globally is strong.
The valuation at which Adyen is going public is a significant upsizing for the company. 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.
Adyen to date has raised $266 million in outside funding, with other investors including Index (its largest shareholder with a 16.86 percent holding of the company, the filing revealed today), Felicis, Temasek and General Atlantic.
Adyen competes against the likes of PayPal, Stripe and more — who are all also ramping up their businesses and ubiquity to rise to the opportunity.
Recently, PayPal announced it would acquire iZettle, another Europe-based financial startup that focuses primarily on mobile point-of-sale payments to physical SMB merchants, although it has also been expanding into other segments. It has also recently announced a deeper integration with Google to accept payments more directly across Google services.
Similarly, Stripe and others are also expanding on other platforms like Microsoft’s, all adding up to more ubiquity and less friction for making financial transactions online.
More to come.