Payment Firm Trustly Drops IPO Timeline Amid Review by Watchdog

(Bloomberg) -- Trustly Group AB has had to shelve plans to raise 8 billion kronor ($950 million) in a stock-market listing after the Swedish payment firm became the target of a regulatory review around its due diligence procedures.

The initial public offering had been slated to take place this quarter. But that timeline is no longer realistic after a preliminary assessment by the Swedish Financial Supervisory Authority exposed potential shortcomings in Trustly’s efforts to screen customers.

The company already acknowledged last month it would need to “take time to fully analyze the preliminary assessment,” and then “revert” to the FSA. On Monday, Trustly said its board and owners still “remain convinced” that an IPO is the way to go, and said the “ambition to list the company remains.”

“However, we have a responsibility to all stakeholders to bring clarity and resolve any outstanding questions from the Swedish FSA’s preliminary assessment,” it said. “Therefore, the Board of Directors has decided not to pursue the plan for a listing in the second quarter. There is today no timeplan set for when the IPO will be completed.”

With its biggest shareholders including Nordic Capital, Alfven & Didrikson and BlackRock Inc., Trustly is part of a tech industry that’s ridden a wave of intense growth during the pandemic. Klarna Bank AB, another Swedish payments firm, earlier this year raised $1 billion, giving it a valuation of over $30 billion. Like Klarna, Trustly has enjoyed rapid expansion in the U.S., where its revenue grew almost 300% at the end of 2020.

Trustly said last month that it conducts “full customer due diligence on our merchants.”

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