Exclusive-QIA, Visa and ADIA set to anchor SoftBank’s PayPay IPO, sources say

SoftBank’s PayPay, a Japanese digital payments provider, is gearing up for a significant U.S. initial public offering, with a group of global investors including Qatar Holdings, Visa, and Abu Dhabi Investment Authority poised to invest over $200 million as cornerstone investors. The IPO could potentially value PayPay at up to $14 billion, making it one of the largest listings for a Japanese company on a U.S. stock exchange.

The sources familiar with the matter cautioned that final commitments have not yet been made, and discussions around the size, terms of the potential investments, and valuation of the deal are ongoing and subject to change. PayPay is expected to list on the Nasdaq next month, with SoftBank aiming to enhance the IPO’s appeal by securing cornerstone investors. The IPO, initially slated for December, was delayed due to a U.S. government shutdown that impacted the regulatory process.

SoftBank has been actively generating funds to support its artificial intelligence initiatives, with a substantial commitment of $30 billion to OpenAI. CEO Masayoshi Son has been divesting assets, including selling off a $5.8 billion stake in Nvidia and $4.8 billion worth of T-Mobile U.S. shares, to fund its AI investments. The upcoming PayPay listing, the first U.S. listing for a SoftBank-majority business since Arm Holdings, could provide a timely cash infusion for the conglomerate.

PayPay recently announced a partnership with Visa as part of its expansion efforts into the U.S. market. The digital payments provider, jointly established by SoftBank and Yahoo Japan in 2018, has been instrumental in driving Japan’s digital transformation by incentivizing consumers to shift away from cash through rebates offered on transactions made via its mobile app. With approximately 72 million registered users as of December 31, PayPay has rapidly grown into one of Japan’s most popular payment platforms within just over seven years of its inception.

The anticipated IPO of PayPay signifies a pivotal moment for SoftBank Group as it continues to focus on advancing its AI capabilities. As the conglomerate paves the way for groundbreaking AI investments, the PayPay listing stands out as a strategic move to bolster its financial position and support its ambitious technological endeavors.