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AMSTERDAM, Netherlands — Financial technology startup Nium told CNBC on Wednesday that it has raised $50 million in new funding from investors and is targeting an IPO in the next 18 months.
The funding round was led by an undisclosed Southeast Asian sovereign wealth fund. The value of Nium is therefore estimated at 1.4 billion US dollars.
That represents a 30% discount to the previous valuation of $2 billion the company achieved in 2022, the last time it raised outside venture capital.
Prajit Nanu, CEO and founder of Nium, said the company will use the fresh capital to double down on mergers and acquisitions, targeting other growth-stage payments companies.
Nanu said his company’s crash was the result of an overall decline in public market valuations of fintech companies.
Fintech share prices have declined sharply in recent years due to macroeconomic pressures such as high inflation and rising interest rates.
“To be realistic, when we raised in early 2022, the public markets were killer,” Nanu said. “Public markets have not been kind to fintech.”
IPO in 18 months
Nanu said that despite the lower valuation, he is still optimistic about Nium’s growth story and is confident the company will go public in the next 18 months and is targeting an IPO in the third or fourth quarter of 2025.
He added that valuation is not an issue for him and that it doesn’t matter what the company values its shares as markets are inherently volatile.
“Whether you go public with $1 billion or $5 billion, it doesn’t matter. Because valuation only happens when you get bought or when you go through an IPO,” he said.
He pointed to the example of Stripe, which achieved a valuation of $95 billion during the turbulent days of 2021 before reducing its value to $50 billion and then reducing its value to $65 billion through secondary stock transactions increased.
Any Nium IPO would be a boon to its investor base, which includes venture capital firms BOND, NewView Capital and Tribe Capital, among others
Not interested in crypto
Nanu said he is not interested in acquiring companies in the cryptocurrency space as he has not done so yet see merchant demand for crypto as a payment method.
“It’s still early days in terms of infrastructure,” Nanu said. “Ultimately, Nium is a layer above many banks in the world.”
“Banks have moved from ‘crypto is hot’ to ‘non-crypto’ to ‘crypto,’” he added. “There is no single shoe that fits everyone.”
This is despite a huge rise in the price of cryptocurrencies such as Bitcoin, which has surged due to renewed investor interest following the approval of spot Bitcoin exchange-traded funds in the US
The price of Bitcoin has increased by around 150% in the last 12 months.
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2024-06-07 11:42:28
www.cnbc.com
