Report: SoftBank Considers US Listing for PayPay Business

SoftBank, startups, Light, investment cuts

SoftBank may be heading stateside to list its PayPay payments business following news that it is considering a U.S. listing.

The potential listing is driven by New York’s greater potential of higher valuations for tech companies in comparison to Tokyo, but the timing of such a move is not known, Reuters reported Wednesday (July 12), citing unnamed sources.

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

SoftBank has previously set a PayPay listing as a goal, with one executive saying last November it was worth just under 1 trillion yen (about $7.2 billion), according to the Reuters report. Wednesday’s news marked the first time it was reported that SoftBank was considering a U.S. listing.

However, PayPay is losing money, which has delayed the listing until the business can demonstrate a clear path to profitability, the report said. PayPay booked a loss before interest, taxes, depreciation and amortization of 11.9 billion yen (about $86 million) in the year ended March, compared to a loss of 43.2 billion yen (about $312 million) a year earlier.

SoftBank’s domestic telecoms business is targeting profitability for the financial unit, which includes PayPay, by the year ending March 2026, per the report.

“Z Holdings shares reacted on hopes that a U.S. listing might invite a premium valuation but recent domestic listings for Rakuten Bank and SBI Sumishin Net Bank indicate there is room for FinTech listings locally,” Astris Advisory Japan analyst Kirk Boodry said in the report.

It was reported July 2 that initial public offerings (IPOs) are back but not all the way back.

“We’re in an IPO market that’s not fully open yet,” Citigroup Global Co-Head of Equity Capital Markets Douglas Adams said at the time. “We’re in rebuilding mode. Rebuilding modes generally aren’t a straight line.”

This year remains a slow one for companies going public. As of June 30, traditional IPOs in the U.S. had raised about $9 billion — a figure that was higher than last year but still below the $87 billion and $24 billion companies had raised midway through 2021 and 2020, respectively.

In March, it was reported that SoftBank’s privately held valuations for its Vision Fund 2 were 40% lower through the second half of 2022.