Payments tech firm Marqeta files IPO as value surpasses $ 16 billion in private markets

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Marqeta headquarters in Oakland, California.

Yalonda M. James | Chronicle of San Francisco | Hearst Newspapers via Getty Images

Marqeta has become one of the hottest companies in digital commerce, although few consumers have ever heard of it.

His name is about to become a lot more familiar. The company filed a stock market application on Friday and, in its prospectus to investors, revealed annualized first-quarter revenue growth of 123% to $ 108 million, while its net loss narrowed to 12, $ 8 million, up from $ 14.5 million a year earlier.

in 2020, annual revenue more than doubled to $ 290.3 million, and the company recorded a loss of $ 47.7 million.

Founded in 2010 and headquartered in Oakland, Calif., Marqeta sells payment technology designed to detect potential fraud and ensure money is channeled correctly. The company issues personalized, physical cards, which resemble credit and debit cards, which DoorDash or Instacart entrepreneurs use to make point-of-sale purchases at restaurants or supermarkets.

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Many of Marqeta’s top customers have just experienced record years as the pandemic pushed commerce to mobile devices. In addition to meal delivery businesses, Marqeta powers Square’s debit card for small business owners and its popular Cash app for peer-to-peer payments. Affirm and Klarna, who provide low-value loans to consumers for purchases such as bicycles and televisions, use Marqeta’s technology to transfer money with their installment loans.

Larry Albukerk, who brokers pre-IPO stocks on EB Exchange, said Marqeta’s shares were trading in the secondary market for $ 33 to $ 35 a share. Based on a total of 484.4 million Class A and Class B shares, as noted in the prospectus, this values ​​the company between $ 16 billion and $ 17 billion.

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A year ago, Marqeta raised capital worth approximately $ 4.3 billion.

“It is certainly one of the hottest companies in the private markets,” said Alburkerk, who also owns shares in Marqeta. “It has been a consistent performance over the past two years and has recently become one of the most sought after stocks to buy pre-public.”

Albukerk said Marqeta is up there with Stripe and Plaid in terms of high-tech stocks that investors are looking for, but Marqeta is the only one of the three to trade on a regular basis as the other two companies are more restrictive with transfers of ownership. .

Marqeta competes at one end of the payment technology market with traditional providers like Fiserv and FIS, and at the other end with modern providers like Adyen and Stripe. Where Marqeta differentiates itself the most is in its card issuance service, which allows customers to create a highly specialized physical or virtual card for their business partners.

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The company says in the risk factor sections of its prospectus that its expansion in 2020 mirrored that of its customers in e-commerce and food and grocery delivery. As the economy reopens, spending habits may change.

“Our net revenue growth in recent periods has increased as new consumers have turned to these services,” the company said. “If this trend in consumer demand and spending patterns slows or reverses as shelter-in-place restrictions ease and the pandemic eases, our net income growth could be affected.”

Marqeta placed 33rd on TBEN’s Disruptor 50 list last year.

LOOK: Jason Gardner, CEO of Marqeta, in partnership with Goldman

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