Direct listings are in fashion in the online payments space, as Stripe Inc is to follow the step of fellow unicorn Wise PLC (LON:WISE) when it joins the US market next year.
However, while Wise decided to skip the traditional IPO route to save money, Stripe is doing it because it doesn’t need to raise cash.
READ: Wise smashes experimental London listing with £8bn valuation
Normally, companies undertake an initial public offering (IPO), where advisors decide at what price shares should be sold on the first day after consulting City institutions, in a process called bookbuild.
In a direct listing, the shares are given directly to the stock exchange, which then holds an ‘auction’ to investors.
Stripe, which was valued at US$95bn in its latest funding round, hired Cleary Gottlieb Steen & Hamilton as a legal adviser for a New York debut, Reuters reported.
It will appoint investment banks later this year so the listing is more likely to go ahead in 2022.
The 11-year-old company, founded by Irish brothers Patrick and John Collison, provides payments software for e-commerce websites and apps, counting Google, Uber, Amazon and Zoom on its client roster. Elon Musk, Peter Thiel and Google’s venture capital arm were early backers.
Wise rose 1% to 974.6p on Monday morning.