Payment tech company Marqeta files for IPO as value tops $16 billion on private markets

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Marqeta Headquarters in Oakland, Calif.

Yalonda M. James | San Francisco Chronicle | Hearst Newspapers by way of Getty Photos

Marqeta has turn into one of many hottest companies in digital commerce, although few shoppers have ever heard of it.

Its identify is about to turn into far more acquainted. On Friday, the corporate filed to go public and, in its prospectus to traders, disclosed annualized income development within the first quarter of 123% to $108 million, whereas its internet loss narrowed to $12.eight million from $14.5 million a yr earlier.

In 2020, annual income greater than doubled to $290.three million, and the corporate recorded a lack of $47.7 million.

Based in 2010 and based mostly in Oakland, California, Marqeta sells fee expertise that is designed to detect potential fraud and make sure that cash is correctly routed. The corporate points custom-made bodily playing cards that seem like credit score and debit playing cards, which contractors from DoorDash or Instacart use to make point-of-sale purchases from eating places or supermarkets.

Lots of Marqeta’s prime clients are coming off report years because the pandemic pushed commerce to cell gadgets. Along with meal-delivery corporations, Marqeta powers Sq.’s debit card for small enterprise house owners and its fashionable Money App for peer-to-peer funds. Affirm and Klarna, which give small-dollar lending to shoppers for purchases like bikes and TVs, use Marqeta’s expertise to maneuver cash with their installment loans.

Larry Albukerk, who brokers pre-IPO shares at EB Trade, stated Marqeta shares have been buying and selling on the secondary marketplace for $33 to $35 every. Based mostly on a complete of 484.Four million Class A and Class B shares, as listed within the prospectus, that values the corporate at about $16 billion to $17 billion.

A yr in the past Marqeta raised capital at a valuation of about $4.three billion.

“It is undoubtedly one of many hottest corporations within the personal markets,” stated Albukerk, who additionally owns some Marqeta shares. “It has been a gentle performer for the final two years and lately has turn into some of the sought-after shares to purchase pre-public.”

Albukerk stated Marqeta is up there with Stripe and Plaid by way of fin-tech shares that traders are searching for, however Marqeta is the one one of many three that trades frequently as a result of the opposite two corporations are extra restrictive with possession transfers.

Marqeta competes on one finish of the fee expertise market with legacy distributors like Fiserv and FIS, and on the opposite finish with trendy distributors like Adyen and Stripe. The place Marqeta most differentiates itself is in its card-issuing service, which permits purchasers to create a really specialised bodily or digital card for his or her enterprise companions.

The corporate says within the danger components sections of its prospectus that its growth in 2020 mirrored that of its purchasers in e-commerce and meals and grocery supply. Because the financial system reopens, spending patterns may change.

“Our internet income development in current intervals has elevated, as further shoppers have shifted to utilizing these companies,” the corporate stated. “If this development in shopper demand and spending patterns slows or reverses as shelter-in-place restrictions ease and because the pandemic subsides, our internet income development could also be adversely affected.”

Marqeta ranked 33rd on CNBC’s Disruptor 50 record final yr.

WATCH: Marqeta CEO Jason Gardner on partnership with Goldman

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