Swedish financial technology startup Trustly, led by CEO Johan Tjarnberg, is holding off on an initial public offering (IPO) for at least another year or two to prove the value of its open banking technology to investors. Trustly reported strong financial results, with revenues of $265 million in 2023 and growth accelerating significantly in the second half of the year. The company’s performance was largely driven by its U.S. business, which has seen substantial growth since its merger with American rival PayWithMyBank in 2020.
Operating profit for Trustly increased by 51% in 2023, with adjusted EBITDA climbing to $51 million. The company has been chipping away at traditional credit card companies like Visa and Mastercard by offering merchants a way to accept payments via open banking technology, cutting out the need for intermediaries and high transaction fees. Trustly has seen heightened demand from U.S. merchants looking to reduce costs, leading to increased adoption of its services across various sectors such as utilities, retail, and travel.
Open banking, a trend gaining momentum globally, allows consumers to make payments directly to a merchant’s bank account without the need for traditional card issuers. Founded in 2008, Trustly competes with other fintech companies in this space and is looking to expand its offerings. The company plans to launch a feature for merchants to set up recurring payments for customers, targeting services like telecom packages and subscription-based streaming platforms. Trustly is also optimistic about growth in the mobile space, particularly in the U.S. where it has already seen success with mobile billing partnerships.
Trustly is used by over 9,000 merchants worldwide, including major companies like Facebook, PayPal, and AT&T. The company is majority-owned by venture capital firm Nordic Capital, with other backers including Alfven & Didrikson, BlackRock, Aberdeen Standard Investments, and Neuberger Berman. Management and employees also have a significant stake in the business. As Trustly continues to grow its user and merchant adoption, it aims to further demonstrate the value of open banking and solidify its position as a competitive player in the financial technology sector.
Despite a strong financial performance in 2023, Trustly is taking a cautious approach towards an IPO, focusing on proving the value of its open banking technology and expanding its offerings to attract more users and merchants. The company’s success in the U.S. market and plans for future products indicate a promising outlook for Trustly as it continues to disrupt the traditional payment processing industry. With the support of its investors and growing market presence, Trustly is well-positioned to capitalize on the momentum of open banking and establish itself as a key player in the evolving fintech landscape.
