Marqeta Headquarters in Oakland, California.
Yalonda M. James | San Francisco Chronicle | Hearst Newspapers via Getty Images
Marqeta has become one of the hottest companies in digital commerce, even though few consumers have ever heard of it.
His name is about to become much more famous. On Friday, the company filed for a stock exchange listing, disclosing in its prospectus to investors, first-quarter revenue growth of 123% to $ 108 million, while net loss fell to $ 12.8 million from $ 14. 5 million a year earlier.
In 2020, annual sales more than doubled to $ 290.3 million, and the company posted a loss of $ 47.7 million.
Founded in 2010 and based in Oakland, California, Marqeta sells payment technology designed to detect potential fraud and ensure that money is routed correctly. The company issues custom physical cards that look like credit and debit cards that contractors from DoorDash or Instacart use to make point-of-sale purchases from restaurants or supermarkets.
Many of Marqeta’s best customers come from record years as the pandemic pushed the trade towards mobile devices. In addition to meal delivery businesses, Marqeta supports Square’s debit card for small business owners and the popular Cash app for peer-to-peer payments. Affirm and Klarna, which provide small loans to consumers for purchases such as bicycles and TVs, use Marqeta’s technology to transfer money with their installment loans.
Larry Albukerk, who trades pre-IPO stock with EB Exchange, said Marqeta stock trades in the secondary market for $ 33 to $ 35 each. Based on a total of 484.4 million Class A and Class B shares as stated in the prospectus, the company values the company at approximately $ 16 billion to $ 17 billion.
A year ago, Marqeta raised capital at a valuation of approximately $ 4.3 billion.
“It is definitely one of the hottest companies in the private markets,” said Albukerk, who also owns some Marqeta shares. “It has been a regular player for the past two years and has recently become one of the most sought-after stocks to buy pre-public.”
Albukerk said Marqeta is above that with Stripe and Plaid in terms of fintech stocks that investors are looking for, but Marqeta is the only one of the three to trade regularly because the other two companies are more restrictive with ownership transfers.
Marqeta competes on one end of the payment technology market with legacy vendors such as Fiserv and FIS, and on the other with modern vendors such as Adyen and Stripe. Where Marqeta stands out most is its card issuing service, which allows customers to create a highly specialized physical or virtual card for their business partners.
The company says in the risk factors sections of its prospectus that its expansion in 2020 mirrored that of its customers in e-commerce and food and grocery delivery. As the economy reopens, spending patterns can change.
“Our net sales growth in recent periods has increased as more consumers have switched to using these services,” the company said. “If this trend in consumer demand and spending slows or reverses as shelter-in-place restrictions ease and the pandemic abates, our net revenue growth could be negatively impacted.”
Marqeta was ranked 33rd on The Washington City Times’s Disruptor 50 list last year.
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