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Rakuten began considering a potential U.S. listing of one of Japan’s largest credit card businesses last month, the sources said. The considerations are in the early stages, with other potential options including a stake sale to a strategic buyer, one of the sources said.

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The company’s considerations of a U.S. IPO had not been reported previously.

Rakuten did not respond to requests for comment.

For PayPay, institutional investors see a baseline valuation of 2 trillion yen, but expect the valuation could exceed 3 trillion yen in the IPO that could take place as early as December, Reuters reported this week.

CARDS CENTRAL TO RAKUTEN’S BUSINESS

Rakuten, which is led by founder and CEO Hiroshi Mikitani, shook up Japan’s finance sector by simplifying the process for applying for credit cards and making them available to a wider range of consumers.

Credit cards are an important part of a web of Rakuten businesses spanning online shopping, banking, travel and other services, with customers accruing loyalty reward points by making payments.

Rakuten also announced plans to list Rakuten Securities, but Mizuho injected funding by taking stakes in the brokerage and card businesses.

Rakuten Card has issued more than 30 million credit cards in Japan. Non-GAAP operating profit at the business grew 20% to 62 billion yen last year but fell 4.5% in the April-June quarter of this year compared to the same period a year earlier due to higher costs.

The IPO considerations come as companies around the world are looking to list in the U.S. as they seek higher valuations.

The U.S. IPO market has had its busiest quarter since the fourth quarter of 2021, with companies raising $24 billion through first-time share sales in the third quarter, according to Dealogic.

($1 = 152.0900 yen)

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