Title: A Vibrant Year Ahead for Cross-Border Payments in the Markets - From IPOs to Exits
In the realm of stock market debuts, 2024 was a quiet year for cross-border payments, with a minimal number of IPOs in the sector. Conversely, 2025 is shaping up to be quite different. The financial landscape has altered, and market conditions, albeit with some caveats, show promising signs. With the S&P 500 up by over 25% since last year and the FTSE 100 exhibiting similar growth in the UK, the stage seems set for a few companies to make their public debuts.
However, the debutantes are not the same as they were four years ago. Many companies are now recuperating from the post-pandemic market slump, and their valuations are yet to reach their former peaks. Payments processor Stripe, for instance, saw its valuation drop from $95bn in 2021 to $50bn in 2023 before ultimately increasing to $65bn last year.
But the paying public market isn't the only option for these rapidly maturing players. With a growing trend towards private equity-backed public market exits, several cross-border payments companies are exploring this avenue. This strategy was exemplified by MoneyGram, which was taken private by Madison Dearborn Partners after a 19-year stint on the NASDAQ. The trend of going private has particularly resonated with retail-focused companies looking to digitize their operations.
Private equity firms have taken note of the robust TAM of the cross-border payments industry, which is forecast to reach $65tn by 2032, and the potential for consolidation and digitization.This has led to an increase in private equity involvement in the sector.
As we look towards 2025, it appears that both market entries and exits are on the horizon. Companies such as Santander’s Ebury and Klarna have begun the IPO process, while others, like Nium, have already marked 2025 as a target for a public debut. The challenge, however, will be achieving the best possible valuation while market conditions remain favorable.
But what about the market conditions themselves? Will they hold? While valuations may be rocked by changing financial conditions, these changes could also present opportunities and prompt uncertainty in some corners of the market. Regulatory shifts and technological advancements, such as the use of advanced data analytics and AI, are expected to play significant roles in shaping the landscape in 2025 and beyond.
In the realm of potential IPOs, companies like Santander's Ebury and Klarna are currently in the process of making their stock market debuts in 2025. For those considering going public, achieving the best possible valuation while market conditions remain favorable is a significant challenge.
However, private equity-backed public market exits have become a popular option for mature cross-border payments companies. This strategy was exemplified by MoneyGram, which was taken private by Madison Dearborn Partners after a long stint on the NASDAQ.
The trend of going private has particularly resonated with retail-focused companies looking to digitize their operations. In fact, payments processor Stripe saw its valuation drop from $95bn in 2021 to $50bn in 2023 before ultimately increasing to $65bn last year.
Investors are paying close attention to the cross-border payments sector, as private equity firms have noted the robust TAM of the industry, which is forecast to reach $65tn by 2032. This has led to an increase in private equity involvement in the sector, positioning it for potential consolidation and digitization.
