SoftBank's payment application operator PayPay (PAYP.US) plans to price its IPO at 17-20 USD/ADS, aiming to raise 1 billion USD.

SoftBank's Japanese payment app operator PayPay announced the terms of its initial public offering (IPO) on Monday. The company plans to raise $1 billion by issuing 55 million American Depositary Shares (ADS) at a price range of $17-20 per ADS. Based on the mid-point of the proposed range, the company's market value will reach $12.4 billion. The company plans to list on the Nasdaq with the stock code "PAYP". The $1 billion fundraising size will make PayPay's IPO the largest ever by a Japanese issuer in the United States, surpassing the dual listing completed by Line Corporation in 2016 (raising $722 million in the US and $427 million in Japan). Less than a month ago, there were reports that PayPay originally planned to raise funds with a valuation of over $19.6 billion. However, macroeconomic headwinds and concerns about disruption from artificial intelligence have put pressure on financial technology stocks in recent times, with most fintech IPOs over the past year trading below their initial prices. PayPay had originally planned to go public in December of last year, but the longest government shutdown in US history delayed the regulatory approval process, leading to the company postponing its planned listing. PayPay's listing will be the first major US listing of a SoftBank majority-owned investment project since the highly anticipated IPO of British chip designer Arm Holdings in 2023. Currently, SoftBank is raising funds through asset monetization to support its expanding artificial intelligence initiatives. Founded in 2018 as a joint venture between SoftBank and Yahoo Japan, PayPay has played a crucial role in driving digital transformation in Japan. The company offers cashback through its mobile app to encourage consumers to reduce cash usage. PayPay operates a digital financial platform connecting users and merchants. Its business is divided into two segments: Payments and Financial Services. The Payments segment includes the QR code-based mobile payment app PayPay and the credit card service PayPay Card. The Financial Services segment includes application banking services provided by PayPay Bank Corporation and investment and brokerage services provided by PayPay Securities Corporation. These services together form an integrated mobile platform that allows users to make payments, access credit, manage bank accounts, and make investments. In just over seven years since its establishment, PayPay has rapidly expanded to become one of the most widely used payment platforms in Japan. As of December 31st, it had approximately 72 million registered users. Japan was known for its "cash is king" mentality, but in recent years, cashless payments have seen a significant increase. However, compared to other countries, Japan still lags behind in payment technology, leaving ample room for growth. Data shows that PayPay generated revenue of $2.3 billion in the 12 months leading up to December 31st.