The CEO of Trustly, Johan Tjarnberg, recently disclosed to CNBC that the Swedish fintech startup is not in a rush to go public with an initial public offering (IPO) despite a substantial increase in operating profit. Tjarnberg emphasized the importance of proving the value and impact of the company’s open banking technology to investors before considering a public listing. With a strong financial performance in 2023, including a revenue of $265 million and significant growth in transaction volumes, Trustly is prioritizing cultivating user adoption and merchant engagement to solidify its position in the market.
Trustly’s success in 2023 was largely attributed to the expansion of its U.S. business following the merger with American rival PayWithMyBank. The company invested heavily in the U.S. market, increasing its staff from 20 employees to 500 in just four years. This strategic move contributed to accelerated growth in core verticals such as utilities, retail, and travel, with a notable 22% of volumes coming from these sectors. Operating profit surged by 51% in 2023, signaling Trustly’s commitment to driving financial performance while expanding its market reach.
Trustly’s innovative open banking technology provides companies with the capability to accept payments directly from consumers’ bank accounts, bypassing traditional intermediary systems like credit card issuers. This approach offers a cost-effective alternative to credit card programs that charge merchants exorbitant fees for transactions, particularly in the U.S. where Trustly has observed heightened demand from merchants seeking to reduce operational costs. By enabling secure and efficient payments, Trustly aims to challenge established payment methods like Mastercard and Visa, positioning itself as a competitive player in the evolving fintech landscape.
Looking ahead, Trustly is focused on introducing new features to enhance customer experience and support recurring payments for services such as telecom packages and subscription-based streaming platforms. The company’s emphasis on mobile billing partnerships, notably with major telecom providers in the U.S., reflects its strategic commitment to driving growth in the mobile space. With a diverse portfolio of over 9,000 global merchants spanning various industries, Trustly has established itself as a trusted payment solution for leading companies including Facebook, PayPal, and Lyft.
Venture capital firm Nordic Capital holds a majority stake of 51.1% in Trustly, underscoring external investor confidence in the company’s growth trajectory. Alfven & Didrikson and BlackRock are significant stakeholders in Trustly, further diversifying the ownership structure. Additionally, Trustly’s management team and employees collectively own 27.4% of the business, aligning their interests with the company’s long-term success. This distribution of ownership highlights the collaborative approach and shared vision driving Trustly’s expansion and innovation within the fintech industry.
Trustly’s strategic focus on market expansion, technological innovation, and customer-centric solutions positions the company for sustained growth and competitive differentiation in the financial technology sector. By prioritizing user adoption, merchant engagement, and operational excellence, Trustly continues to demonstrate its value proposition and market potential. Despite deferring its IPO for the time being, Trustly’s strong financial performance and strategic initiatives underscore a promising outlook for the company’s future growth and industry impact.
Leave a Reply