Digital finance is hot stuff right now and Marqeta is riding that wave; with its recent S-1 filing, we answer the questions that you ask.
Founded in 2010, Marqeta is the latest in an expanding list of digital payment solutions companies. It is currently poised to emerge from the pandemic as part of a new generation of businesses that will disrupt the market through new and advanced technology.
The fintech market, in particular, is booming as contactless and digital forms of payment processing have increased over the last year and a half. Forming part of this trend, Marqeta provides modern tools that many companies need to update or transition to digital payment solutions. Additionally, Marqeta sells technology that can detect potential fraud as well as ensure that money is accurately routed and reaches its destination.
It already has a plethora of customers, among which Uber, DoorDash, Instacart, JPMorgan & Chase, and Affirm can be counted. Its popularity is about to surge further as, on 14 May, it filed to go public.
When can I buy Marqeta stock?
Marqeta does not have an official date to go public. However, as the company has now filed its S-1 document, the process can take anywhere between two weeks to three months. Once it has gone public, retail investors can find the stock on the NASDAQ under the ticker symbol ‘MQ’.
Insiders have said they expect Marqeta’s IPO to raise as much as $10 billion. Currently, there is no information as to the stock pricing for its IPO.
According to the S-1 filing, Marqeta experienced huge growth in 2020 with just over $60 billion transactions processed by the service, up 176% year-over-year (YoY). In its quarter ended 31 March, it processed a further $24 billion, up 166% YoY.
Furthermore, its net revenue for 2020 came in at $290 million, up 102% YoY. For the most recent quarter, it came in at $107 million, up 127% YoY.
However, the company does have a history of losses. For 2020 it recorded a net loss of $47.6 million and for the most recent quarter, a net loss of $12.8 million. Despite these losses, the company has managed to reduce its net loss margin from 40% to 16% YoY.
Marqeta growth potential
Marqeta has a total addressable global market in the card payments sector of $45 trillion, which is expected to reach $80 trillion by 2030. This growth has been attributed to the rise in digital banks and other companies that have then sought out these services. In particular, the pandemic has given many of Marqeta’s top customer’s record years, with the likes of Square, Affirm, and Klarna profiting from the growth in peer-to-peer payments services.
Marqeta is also well placed for the growth of the gig-economy as Instacart and DoorDash were two of the company’s first clients. Marqeta’s API technology allows companies to issue cards to workers which gives them more control over transaction approval for food or meal delivery. With its innovative technology, Marqeta has the ability to grow beyond the gig economy and into largescale global businesses.
Unfortunately, this company is operating in a market that has attracted lots of talent. For example, Stripe, which is also expected to go public this year, recently released a competing API allowing its customers to create and control virtual and physical cards for employee use. Zipcar and Postmates have already been attracted to the service.
SoFi, another player in the fintech space who will also be going public soon, just bought Galileo for around $1.2 billion. Galileo is a company that issues debit cards to companies.
To find out about SoFi’s own public debut, you can read more here.
In the end, whilst this shows an increased level of competition in the industry, competition often means that the market is healthy and full of growth potential, which is always a good thing for a company that is about to go public.
To access Marqeta’s S-1 filing you can find it here.
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