Marqeta IPO focuses on fintech payments

Marqeta, a debit card company that gets most of its business through Jack Dorsey’s Payment Processors Square, aims to complete one of fintech’s largest lists this year by testing a business model that has risen due to reserves in traditional banks during the 2008 financial crisis. :

In the company ‘s market price range, Marqeta would have a market capitalization of almost $ 13 billion, raising $ 1.1 billion in its initial public offering, which was due to buy on Tuesday.

The IPO adds to the latest fin planned fintech listings by companies, including online lender SoFi և free of charge brokerage Robinhood.

Based in Oakland, California, Marqeta creates branded debit cards, prepaid cards for corporate clients, including DoorDash delivery group, Swedish fintech Klarna, as well as Square.

Marqeta’s listing plan focuses on the relationship between fintech start-ups and small community banks in the United States, which have become closer partners since the financial crisis.

Most of Marqeta’s revenue comes from exchange fees, the costs that merchants pay when their customers use debit cards to make purchases.

Banks with less than $ 10 billion in assets receive higher exchange fees than larger lenders as a result of the 2010 Dodd Frank Act in Durbin.

Fintech startups such as Marqeta և Chime, a fast-growing personal finance program in the United States, have taken advantage of this discrepancy by partnering with small community banks to collect payment fees.

Marqeta’s largest partner is Sutton Bank, which receives payment from Marqeta for the exchange fee. The company also transfers part of its exchange proceeds to Square to other customers.

Some analysts and investors have questioned the long-term viability of the operation, with the growth of fintech start-ups drawing attention from regulators and large banks.

In a statement, Marqeta warned that exchange fees were subject to “strict legal and regulatory oversight” and said it was consciously cooperating with the vacated banks under the Durbin change.

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“You can call it arbitrage, you can call it a loophole, whatever you want to call it,” said Kalum Godwin, chief economist at global consulting firm CMSPI. However, “it is very likely that we will be years away from changing anything if it changes at all,” he said.

The marketing business flourished during the epidemic as closed Americans turned to digital financial services such as Square’s Cash App and e-commerce companies like DoorDash.

Last year, Marqeta more than doubled its net income to $ 290 million, while reducing its losses to $ 48 million. Square’s business accounted for 73 percent of Marqeta’s net income in the first quarter, up from last year. According to the company, Marqeta’s agreements with Square are valid until 2024.

If Marqeta reaches the top of its price range, its market capitalization will almost triple the rating it received in May last year during its financing. Granite Ventures և Iconiq Capital faced the IPO as the company’s largest foreign investors.

Marqeta CEO Ason Eason Gardner will own a $ 1.7 billion stake in the company through a special stake of 10 votes.

Goldman Sachs և JPMorgan serve as Deputy Chief Offer.

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