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 MQ, +12.00% shares surged more than 20% higher than their IPO price of $27 at the beginning of trading to an intraday high of $32.75, but pared those gains over the trading session. Shares were last up about 7% from the IPO price in afternoon trading.
The 11-year-old company has 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.
Before late Tuesday’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. At the peak of Wednesday trading, Marqeta would have been worth more than $17 billion.
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. SQ, -1.61%. 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. DASH, +0.42%, 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.”