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June 9, 2021, 4:13 p.m. EDT

Marqeta stock jumps out of the IPO gate, finishes with valuation just over $16 billion

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By Wallace Witkowski

Marqeta Inc. shares jumped on their first day of trading Wednesday, after the payments infrastructure company priced its initial public offering above its previously forecast range.

Marqeta /zigman2/quotes/227203754/composite MQ +2.13% shares surged more than 20% above their IPO price of $27 at the beginning of trading to an intraday high of $32.75. While gains pared over the session to an intraday low of $28.62, shares closed the day with a gain of 13% at $30.52.

Read: Marqeta prices IPO at $27, valuing company around $15 billion

The 11-year-old company had been thinking about going public “for a long time,” Marqeta Chief Financial Officer Tripp Faix told MarketWatch in an interview.

“It’s about giving visibility to others, including our partners and customers, visibility into the strength of this company,” Faix told MarketWatch.

Read: Marqeta IPO: 5 things to know about the fintech company serving Square, DoorDash and others

Before Tuesday night’s pricing, Marqeta had forecast a price range of $20 to $24 a share, but the much higher price that was put on the shares led to large returns as well as a larger valuation. Should underwriters use all their options to buy additional stock, Marqeta stands to raise about $1.4 billion. With about 537 million shares outstanding, the IPO price gave the company a valuation of more than $14 billion, but as of Wednesday’s close, Marqeta commanded a valuation of $16.18 billion, according to FactSet data.

In addition to using proceeds for the standard working capital and general corporate purposes, Marqeta said in its filing with the Securities and Exchange Commission that it plans to use proceeds to fund its growth plans on a global level.

Currently, the Oakland, Calif.-based company gets 70% of its revenue from its largest customer, Square Inc. /zigman2/quotes/205989440/composite SQ +1.29% . While the company has a multiyear agreement in place with Square, Marqeta plans to broaden its client base and expand geographically beyond the 36 countries it currently serves, Faix said.

“Our job is to go find the next 10, 20 Squares,” Faix told MarketWatch.

One thing that sets Marqeta apart from other payment companies is a feature it calls “Just-In-Time funding,” Faix said. In the case of a company like DoorDash Inc. /zigman2/quotes/222973991/composite DASH +0.61% , when a driver picks up a delivery from a vendor and uses a card issued by Marqeta, that sends a message to Marqeta, which verifies the transaction based on information DoorDash has.

“Is the driver on shift? Is it the right basket size? Is the driver at the right location?” Faix said. “It essentially enables DoorDash to virtually eliminate fraud.”

/zigman2/quotes/227203754/composite
US : U.S.: Nasdaq
$ 22.99
+0.48 +2.13%
Volume: 7.09M
Oct. 18, 2021 4:00p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$12.14 billion
Rev. per Employee
$570,318
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/zigman2/quotes/205989440/composite
US : U.S.: NYSE
$ 252.20
+3.20 +1.29%
Volume: 6.91M
Oct. 18, 2021 4:00p
P/E Ratio
223.52
Dividend Yield
N/A
Market Cap
$115.04 billion
Rev. per Employee
$1.73M
loading...
/zigman2/quotes/222973991/composite
US : U.S.: NYSE
$ 215.37
+1.30 +0.61%
Volume: 956,392
Oct. 18, 2021 4:00p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$72.34 billion
Rev. per Employee
$742,666
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