Rakuten Group Corp is considering an initial public offering (IPO) of its credit card business in the United States, potentially valuing the unit at more than $8.6 billion, people with knowledge of the matter said.
The Japanese e-commerce and fintech conglomerate is working with advisors to explore a listing that could occur as early as next year, the sources said. An IPO would allow Rakuten to unlock value from the fast-growing credit card division and fund further expansion in a competitive market. Rakuten’s credit card business, known for its rewards program and partnerships, has seen significant growth in recent years, fueled by increasing consumer spending and a shift towards digital payments.The move comes as Rakuten seeks to streamline its operations and focus on core businesses, following a period of investment in areas like mobile communications and fintech.
rakuten is weighing a U.S. IPO to capitalize on investor appetite for high-growth fintech companies and potentially achieve a higher valuation than it could in Japan,the sources added. The company aims to leverage the U.S. market’s deeper pool of capital and broader investor base. The potential IPO could be one of the largest fintech listings in recent years, attracting significant attention from Wall Street.
The credit card unit’s revenue rose 18% to 256.8 billion yen ($1.7 billion) in the first half of 2024, according to Rakuten’s earnings report. It boasts over 21 million cardholders. Rakuten has not finalized the details of the IPO, including the size of the offering and the exchange where it will be listed, and the plans could change, the sources cautioned. Representatives for Rakuten declined to comment.
