Unlock the Editor’s Digest for free
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
PayPay has filed for a US listing that could value Japan’s ubiquitous payments company at more than $10bn and help fund some of owner SoftBank’s massive bets on artificial intelligence.
The tech group founded by Masayoshi Son said on Friday that PayPay had applied to list American depositary shares in the US, but the “exact schedule, size and price for the public listing have not yet been determined”.
People familiar with the offering said SoftBank could aim to raise more than $2bn from the sale, which could put PayPay’s valuation in excess of $10bn, in line with analysts’ estimates. One of the people said the listing could happen by the end of the year.
SoftBank owns roughly 34 per cent of the company through its Vision Fund 2 investment vehicle, which is backed by Son and the group. SoftBank said it “intends that PayPay will continue to be its subsidiary” after the listing.
One of the people familiar with the offering said the group could sell 20 per cent and bide its time before potentially reducing its stake further. The person added that a dual listing in Japan could be possible at a later date.
Son has been aggressively investing in AI and has pledged $500bn to the Stargate project to scale up US data centres and AI infrastructure with OpenAI, Oracle and Abu Dhabi’s MGX state fund.
At the same time, SoftBank is building capacity in chip design and production, centred around its ownership of Arm in the UK as well as stakes in Nvidia and the world’s biggest chipmaker, TSMC.
The group is leading a $40bn funding round for OpenAI that values the ChatGPT maker at $300bn and is exploring a massive robotics and AI complex in Arizona.
As Son continues to increase the ambition of his bets, SoftBank’s shares have soared by almost 80 per cent this year to all-time highs, with investors betting on a pipeline of lucrative initial public offerings and that the group’s stake in OpenAI will prove a valuable asset. The Vision funds have a “late-stage portfolio valued at $45bn”, SoftBank said this month.
“What is happening now is that investors are factoring in big upcoming IPOs like Klarna and PayPay and at the same time are viewing SoftBank as a pure play on OpenAI,” said David Gibson, an analyst at MST Financial. TikTok owner ByteDance is another holding viewed as approaching an IPO.
Gibson added that the money raised from the PayPay listing could help fund the $30bn to $49bn that SoftBank will need in the next 12 to 18 months for Stargate and the planned increase in its OpenAI stake.
PayPay runs a ubiquitous payment option — often one of the only options alongside cash — in Japan. Founded in 2018, it also offers banking and credit cards and now has more than 70mn users, according to the company.
“This implies that more than one in every two people in Japan and approximately two out of every three smartphone users in Japan, are utilizing the service,” PayPay said last month.
