Japanese BNPL Paidy considering IPO

Paidy, a Japanese fintech unicorn offering Buy Now, Pay Later (BNPL) services, is considering a public listing in the near future, according to the Financial Times.

Although Japan is traditionally cash-centric, distrust for traditional credit is affecting consumers worldwide, and the need for digital payment systems is growing more apparent with cash limiting e-commerce logistics in refunding and returns.

Paidy’s services enable users to buy services now and pay the next month, as well as split the cost of payments into three, zero-interest installments, which is the first time these BNPL services have been offered in the country.

The company recently raised a $120 million Series D with participation from Wellington Management, Tybourne Capital, Soros Capital and JS Capital.

Now at 6 million users in Japan and a $1.3 billion valuation, market experts and investors say Paidy is making plans to debut on the country’s Tokyo Stock Exchange later this year. The company says it still does not have a real timetable for a listing.

“We have access to capital. In our business, it’s also important to have access to credit lines, which we do, but at the same time, every company does mature and get to the point where it also makes sense to be a public company,” Paidy founder Russell Cummer told the Financial Times.

The company has seen rapid growth in the past year, as BNPL has exploded across the globe and continues to integrate into new and existing financial technologies. Paidy is riding that wave to large growth, despite the BNPL trend still being relatively small in comparison to other countries in Latin America, Europe and Australia.

Klarna, Afterpay and Affirm have led the push in those regions, with Paidy hoping to follow their success in Japan, where the post-payment service volume of transactions is expected to double from ¥882bn ($8bn) in 2020 to ¥1.88tn in 2024.

If you’re following the news, a BNPL IPO shouldn’t be too surprising, considering Affirm’s huge Amazon partnership announcement over the weekend, and Square’s $29 billion all-stock acquisition of Afterpay.

In other recent fintech news, Build-Your-Own payroll infrastructure company Zeal raised a $13 million Series A led by Spark Capital. Sub-Saharan financial infrastructure company pawaPay also raised a $9 million seed round to offer API-centered connections to telecom operator’s fintech services.

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