The CEO of Swedish fintech startup Trustly, Johan Tjarnberg, recently discussed the company’s decision to delay its initial public offering (IPO) despite a 51% increase in operating profit. Tjarnberg revealed that Trustly intends to wait another year or two before going public to demonstrate the value of its open banking technology to potential investors. He emphasized the need to prove that open banking is a significant trend and is here to stay before entering the public market.
Although Trustly reported impressive financial results, including revenues of $265 million in 2023 and a 27% growth rate in the second half of the year compared to 2022, the company is focused on solidifying its position in the market before pursuing an IPO. The increase in transaction volumes by 48% and an operating profit surge of 51% in 2023 indicate the company’s strong performance across various verticals, with the U.S. market playing a crucial role in driving growth.
Trustly’s open banking technology enables companies to accept payments directly from consumers’ bank accounts without intermediaries like card issuers. This approach offers an alternative to traditional credit card programs such as Mastercard and Visa, which often impose high fees on merchants. Tjarnberg highlighted the increasing demand for cost-effective payment solutions, especially in the U.S., where Trustly has witnessed a rise in merchant adoption due to the competitive nature of card processing fees.
The rise of open banking has reshaped the financial landscape, with regulations mandating banks to share account data and payment capabilities with third-party entities. Trustly competes with other fintech companies like GoCardless, TrueLayer, Volt, Bud, and Yapily in the rapidly evolving market. The company is set to introduce features like recurring payments to cater to evolving customer needs, targeting sectors such as telecom and subscription services.
Trustly’s ownership structure includes venture capital firm Nordic Capital as the majority stakeholder with a 51.1% ownership share. Other major investors like Alfven & Didrikson, BlackRock, Aberdeen Standard Investments, and Neuberger Berman hold smaller stakes in the company. Trustly’s management and employees collectively own 27.4% of the business, showcasing a diversified ownership base.
Trustly’s decision to postpone its IPO despite strong financial performance reflects the company’s strategic focus on consolidating its position in the market and showcasing the value of its open banking technology. With a commitment to innovation and customer-centric solutions, Trustly is poised for further growth and expansion in the evolving fintech landscape.