Overview
A group of international investors - among them Qatar Holdings, the investment arm of the Qatar Investment Authority, Visa and the Abu Dhabi Investment Authority - is lining up to provide cornerstone financing of more than $200 million for the U.S. initial public offering of PayPay, the Japanese digital payments firm majority-owned by SoftBank, according to two people familiar with the matter. Those people said PayPay is seeking a valuation of up to $14 billion in the offering.
Deal status and uncertainties
The individuals who provided the information asked not to be identified because the financing arrangements have not been publicly disclosed. They emphasized that no final commitments have been made. The size and terms of any cornerstone investments, as well as the eventual valuation of the IPO, remain under negotiation and could change.
PayPay is planning to list on the Nasdaq next month, one of the people said. SoftBank is reportedly hoping that securing prominent cornerstone investors will increase the attractiveness of the share sale to other institutional buyers.
Originally, the IPO was expected to proceed in December, but the timetable was pushed back after a prolonged U.S. government shutdown slowed the regulatory review process. Requests for comment to PayPay, SoftBank, Qatar Holdings, Visa and ADIA did not receive immediate responses.
Context within SoftBank's funding strategy
The proposed PayPay listing arrives as SoftBank shifts capital toward artificial intelligence investments. The conglomerate has committed $30 billion to OpenAI, building on an earlier investment of roughly $41 billion that the company said was completed in December for an estimated 11% stake. To help finance its AI strategy, SoftBank's CEO has sold large stakes in other holdings, including assets reported at $5.8 billion in Nvidia and $4.8 billion in T-Mobile U.S. shares.
Because PayPay would be the first U.S. listing of a SoftBank-majority business since Arm Holdings, the offering could provide a timely infusion of cash for the group if it proceeds as discussed by the sources.
Business details and recent developments
PayPay, which was jointly established by SoftBank and Yahoo Japan in 2018, has played a notable role in shifting consumer behavior in Japan away from cash by offering rebates for payments through its mobile app. The service has seen rapid growth since its founding, reaching about 72 million registered users as of December 31.
Earlier this month PayPay announced a partnership with Visa as part of efforts to expand into the U.S. market.
Conclusion
The involvement of sovereign and strategic investors as potential cornerstone backers could strengthen the IPO's reception. However, the transaction remains conditional on negotiations and regulatory timing, and the final structure and valuation may change before any filing becomes definitive.