Investors expect the valuation of PayPay could exceed 3 trillion yen ($20 billion) as SoftBank prepares for an initial public offering of the Japanese payments app operator in the United States as early as December, according to two sources.
SoftBank has been meeting with institutional investors since mid-September to discuss potential valuations in the IPO, the sources, who are familiar with the matter, said.
Investors see 2 trillion yen as a baseline but expect the valuation could top 3 trillion yen, according to the sources.
The potential valuation and the views of investors are being reported by Reuters for the first time. PayPay declined to comment.
The sources declined to be named as the information is not public, and cautioned that deliberations are continuing and factors including valuation remain subject to market conditions.
The deliberations come as the U.S. IPO market enjoyed its busiest quarter since the fourth quarter of 2021, with companies raising $24 billion through first-time share sales in the third quarter, according to Dealogic.
The baseline valuation is based on expansion of PayPay’s Japanese business but there is a range of views among investors about its prospects for growing its overseas footprint, which could support a higher valuation, one of the sources said.
PayPay announced last month that users would be able to make payments abroad, beginning with South Korea, which is a popular foreign destination for Japanese travellers.
PayPay valuation could exceed $20 billion in planned US IPO: Reuters
