Europe is set for another high-profile IPO in the payments technology space with news Nets Holdings is planning to go public this year.
The company says that it is preparing for a public offering the Nasdaq Copenhagen in which it hopes to raise around DKK5.5bn (USD823m). The IPO could reportedly take place in October.
Nets, an international digital payments network, forms the backbone of the Nordic payments landscape, connecting banks, businesses, the public sector, merchants and consumers. In Denmark, the firm says 98% of in-store transactions touch at least one Nets service.
It was snapped up from a group of Nordic banks including Danske Bank, Nordea and DNB by Advent International and Bain Capital in 2014 alongside Danish pension fund ATP for USD3.1bn.
Bain and Advent also own WorldPay, which they bought back in 2010 from RBS and which went public in London’s biggest fintech IPO to date last year. It is likely they are looking to emulate the success of World Pay’s flotation, which was London’s biggest IPO last year.
In the past couple of years Nets has doubled down on digital payments as it looks to capture the Nordic region’s advanced appetite for non-cash payments. This year alone the company has launched 10 new products, including contactless card Dankort and a digital wallet in Norway.
“The IPO of Nets is the next step in the development of the Nets group following a period of rapid growth and considerable investment, during which the business has been transformed,” says Bo Nilsson, CEO of Nets.
“Nets is now a highly commercial, customer-centric, innovative leader in the fast-growing digital payments space. We believe these changes, combined with our unique business model and the exceptional efforts from our employees, make us a company well placed for long-term future growth and a compelling story for potential investors.”
Nets is headquartered in the Danish capital, but spans across Norway, Finland, Sweden and Estonia with growing presence in the wider Baltic region.
Its corporate division offers payments platform for things like recurring bills and credit transactions for businesses. Meanwhile its financial and network services offer payment processing services for 200 issuers of cards in the region, plus things like fraud and dispute services. Meanwhile its merchant services division offers merchants payment acceptance solutions.
The firm’s revenue last year was DKK6.84bn with EBITDA of DKK2.25bn. The firm says it processed 7.3bn card transactions last year across 35.1m cards. It has 300,000 merchants on its books of which 10% are online, 240,000 corporate customers and serves more than 240 banks.
Activity is only expected to continue around core financial software systems providers in the coming years. In July MasterCard confirmed months of rumour with the acquisition of a 92.4% stake in UK based payments systems VocaLink for £700 million ($920 million).
A survey of the country’s internet users finds that over 70% no longer use cash for day-to-day purchases.
The Federal Reserve Banks and The Clearing House develop local market practices to facilitate end-to-end payments tracking for their participants.
The European Banking Authority said that its proposed rules for stronger customer authentication would be relaxed for payments under €10.
A relatively small population and take-up of the latest technologies makes the country a testbed for payment innovation, according to an ANZ Group report.