Adyen Reaches New Heights With IPO Launch

by Raymond Pucci 0

adyen

To the surprise of no one—Adyen will finally go public, scheduled for June 13. As the following Bloomberg article reports, this IPO represents another milestone for Adyen that has achieved ultra-fast growth in the payments world.

For Pieter van der Does and Arnout Schuijff, co-founders of Adyen BV, replacing PayPal Holdings Inc. as EBay Inc.’s payment processor was a major coup. But the Dutch firm’s June 13 share offering on the Euronext stock exchange, announced Tuesday, represents the fulfillment of a decades-long dream.

Van der Does and Schuijff helped establish one of the first online payment processors, Bibit, back in the 1990s dot-com boom. Royal Bank of Scotland acquired it in 2004. But in 2006, Bibit’s founders checked out to form a new venture — Adyen — and this time, Van der Does told Bloomberg in a 2016 interview, they had no intention of ever selling out.

By 2017, Adyen was processing in excess of $122 billion in payments for the year, an increase of 61 percent from the year before, and generated $1.2 billion in revenue, according to financial filings. Uber Technologies Inc.Netflix Inc.Spotify Technology SA, and Facebook Inc., are all customers.

On Tuesday, the company announced its intention to go public and generate as much as 947 million euros ($1.1 billion) for existing investors in one of the biggest European fintech IPOs in years, valuing the company at $8.3 billion. It hits as the battle to rule Europe’s payments infrastructure is intensifying to an unprecedented degree.

For years, the systems for processing payments in stores and online have been controlled by big banks, credit card issuers, and a few longstanding IT suppliers. Yet Adyen is part of a new breed of fintech firms challenging this hegemony, and the European Union has embraced this new order as a way to stoke more choices for consumers.

By now, Adyen’s rapid rise is well known, but no less impressive given how it has positioned itself to compete with the legacy payment processors. As a major fintech player, Adyen made its bones providing payment services to charter members of so-called lifestyle commerce companies such as Uber, Netflix, and Facebook—and the rest is history. Adyen is built to handle the omnichannel strategy needs of global merchants, but keep in mind that it will still be susceptible to potential disruptive forces in the payments world, including person-to-person (P2P) payments and lower processing fees. Time will tell, but many other privately held fintechs will be watching Adyen’s post IPO period with extreme interest and financial calculators in hand.

Overview by Raymond Pucci, Associate Director, Research Services at Mercator Advisory Group