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Trustly, a fintech company backed by BlackRock, expects IPO to be at least one year away despite 51% increase in profits

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The CEO of Swedish financial technology startup Trustly, Johan Tjarnberg, reveals in an exclusive interview with CNBC that the company is still a year or two away from an initial public offering (IPO), despite a 51% jump in operating profit. He emphasizes the importance of proving the value of Trustly’s open banking technology to investors before going public. Trustly reported impressive financial results for the 2023 full year, with revenues reaching $265 million and growth accelerating significantly in the second half of the year.

Tjarnberg attributes Trustly’s strong performance in 2023 to the growth of its U.S. business, which saw a significant increase in transaction volumes. The company’s collaboration with American rival PayWithMyBank in 2020 has been instrumental in its expansion in the U.S. market. Trustly observed heightened growth in sectors like utilities, retail, and travel in the first quarter of this year, with 22% of volumes coming from these core verticals, up 44% over the past year.

Trustly’s operating profit surged by 51% in 2023, with adjusted EBITDA climbing to $51 million. The company has positioned itself as an alternative to traditional credit card programs like Visa and Mastercard, offering merchants the ability to accept payments directly to their bank accounts through open banking technology. This has led to increased demand from merchants in the U.S. looking to reduce costs associated with high card processing fees.

Open banking has gained momentum, particularly in Europe, due to regulations requiring banks to open their clients’ account data and payment functionalities to third-party firms. Trustly, founded in 2008, competes with other fintech companies in the space and has plans to launch new features such as recurring payments for merchants targeting telecom and subscription-based services. The company is also focusing on the mobile space, with partnerships established with major companies like AT&T and T-Mobile.

Trustly is used by over 9,000 merchants globally, including well-known brands like Facebook, PayPal, and eBay. The company is majority-owned by venture capital firm Nordic Capital, with other backers including Alfven & Didrikson, BlackRock, Aberdeen Standard Investments, and Neuberger Berman. Trustly’s management and employees also own a significant stake in the business.

As Trustly continues to solidify its position in the fintech industry and expand its market presence, the company remains committed to demonstrating the value of its innovative open banking technology to potential investors. The decision to delay an IPO reflects Trustly’s strategic approach to building sustainable growth and delivering value to its stakeholders.

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