The CEO of Swedish fintech startup Trustly, Johan Tjarnberg, has revealed that despite a 51% increase in operating profit, the company is not planning an initial public offering for at least another year or two. Tjarnberg emphasized the importance of proving the value of their open banking technology to investors before considering going public. He highlighted the need to demonstrate user and merchant adoption in order to solidify Trustly’s position within the market.
Financial Performance
Trustly’s financial results were impressive, with revenues reaching $265 million in the 2023 fiscal year. The company experienced a significant growth acceleration in the second half of the year, with a 27% increase compared to the same period in 2022. Transaction volumes also surged by 48% during this time. Tjarnberg attributed much of Trustly’s success in 2023 to the growth of its U.S. business, which expanded significantly following its merger with PayWithMyBank in 2020.
Trustly’s core focus lies in enabling companies to accept payments through open banking technology, which allows consumers to make direct payments to merchants’ bank accounts without the need for intermediaries like credit card issuers. This alternative to traditional credit card programs, such as those offered by Mastercard and Visa, has resonated with merchants seeking to reduce transaction fees. Tjarnberg highlighted the heightened demand from U.S. merchants looking to lower costs, showcasing Trustly’s potential to be a disruptor in the payment industry.
Embracing Innovation
As a pioneer in the open banking space, Trustly is continuously evolving to meet the changing demands of the market. The company is set to introduce a feature that will enable merchants to set up recurring payments for customers, catering to subscription-based services like telecom packages and music streaming. Trustly’s bullish approach towards mobile payments, especially in the U.S., has already seen positive results through partnerships with major telecom providers like AT&T and T-Mobile.
A Global Presence
With over 9,000 merchants worldwide, Trustly has established itself as a key player in the payments industry. Its client roster includes tech giants like Facebook, Alibaba, and PayPal, showcasing the widespread adoption of its open banking solutions. The company’s majority ownership by venture capital firm Nordic Capital, with other significant backers like Alfven & Didrikson and BlackRock, demonstrates confidence in Trustly’s long-term growth potential.
As Trustly continues to navigate the rapidly evolving fintech landscape, its focus on innovation and customer-centric solutions will be critical to its future success. By staying true to its mission of providing a viable alternative to traditional payment methods through open banking, Trustly is poised to reshape the payments industry. While an IPO may still be on the horizon, the company’s commitment to driving user and merchant adoption sets a strong foundation for its future growth. Trustly’s journey serves as a testament to the transformative power of fintech in shaping the way we transact in the digital age.