Rakuten prepares digital bank IPO despite dismal market
Rakuten’s adventures in mobile have given the Japanese e-commerce group a rabid thirst for capital. So much so that it is prepared to list the group’s digital bank at the worst possible time.
If you had to pick the worst time to launch the IPO of a digital bank in Asia, right now would be a decent candidate.
A year or so ago, Korea’s KakaoBank briefly became the most valuable bank in the country after a knockout listing; today it trades at barely a third of its launch price. The tech sector is in freefall and Asian fintechs – Paytm, Alibaba/Ant – have felt the worst of it.
Yet in July, the Japanese e-commerce group Rakuten – often dubbed Japan’s Amazon – chose this moment to announce the IPO of its own digital banking arm. Daiwa is appointed as underwriter, and it has quite a job to do.
Why would anyone do this? The answer has to do with a strikingly ambitious plan by founder Hiroshi Mikitani to transform Rakuten from an e-commerce group to a telecoms player, with a mobile network ready to go head to head with NTT DoCoMo, SoftBank and others. Combining all these things – consumer e-commerce, telecoms, banking, brokerage – would make a powerful force.