SoftBank Eyes $20 Billion U.S. IPO for PayPay
Investors view Valuation Above 3 Trillion Yen
Investors expect PayPay could be valued above 3 trillion yen ($20 billion) as SoftBank Group prepares an initial public offering of the Japanese payments app operator in the United States as ahead as December, according to two people familiar with the discussions.
SoftBank has been meeting institutional investors since mid-September to gauge appetite and discuss possible valuations, the sources said. They added that investors view around 2 trillion yen as a baseline but believe the number could rise depending on demand and market conditions. PayPay declined to comment.
The talks, reported by Reuters for the first time, come as the U.S. IPO market experiences its busiest quarter since late 2021, with companies raising $24 billion through first-time share sales in the third quarter, according to Dealogic data.
Investor Takeaway
IPO Outlook and Market Context
The planned offering is part of SoftBank’s broader effort to unlock value from its portfolio and tap a receptive U.S. market where tech valuations have rebounded. The potential $20 billion price tag would make PayPay one of the largest Japanese fintech listings overseas in recent years.
“The key focus going forward will be to what extent overseas expansion can be realistically pictured as a growth story, given the lack of business foundations not only in the U.S. but also in Asia,” one of the sources said.
The company announced last month that users would be able to make payments abroad, begining with South Korea, one of the most popular destinations for Japanese travelers. Analysts said the move signals an effort to build cross-border payment volume, which could assist justify a premium valuation if successful.
Domestic Growth and Financial Performance
PayPay has played a central role in moving Japanese consumers away from cash, offering rebates and app-based loyalty programs that spurred rapid adoption. It is now Japan’s market leader in QR code payments and has expanded into banking and credit card services.
Japan’s cashless payments ratio exceeded 40% last year, up from 29% in 2019, but still trails South Korea and China, where it surpasses 80%. The government aims to push cashless usage higher to and address labor shortages in the retail sector.
SoftBank’s telecom arm said operating profit at its financial segment — which includes PayPay — more than doubled to 18.1 billion yen in the April–June quarter. “Structural profit improvement is progressing, and future growth can be anticipated,” said Yukari Housui, analyst at SBI Securities.
Investor Takeaway
Ownership and Expansion Plans
PayPay’s ownership is split among several SoftBank entities, including wireless carrier SoftBank Corp, the Vision Fund, and internet group LY Corp — a joint venture between SoftBank and South Korea’s Naver Corp. The company recently bought a 40% stake in Binance Japan and plans to introduce new crypto services, a move viewn as part of a broader digital finance strategy.
SoftBank has been exploring U.S. listings for some of its domestic assets to attract higher valuations. Around 20 Japanese companies have over the past five years, though several later delisted later than fragile performance. Round One, operator of amusement centers, is also considering overseas listings for two subsidiaries as it expands in the U.S.
For SoftBank, a successful PayPay listing would mark a major return to the later than the group’s cautious years of deleveraging. Market watchers say the valuation talks will be a key test of investor confidence in Japan’s fintech sector as well as SoftBank’s ability to reignite its dealmaking momentum.
