Rakuten studies US IPO for credit card arm amid rising fintech competition

Japanese e-commerce conglomerate Rakuten Group is evaluating an initial public offering in the United States for Rakuten Card Co., one of Japan’s largest credit-card issuers, according to two people familiar with the discussions.

Early-stage review follows rival’s listing plans

The review started in September and remains preliminary, the sources said. A potential IPO is one of several scenarios under consideration; selling a minority stake to a strategic investor is also on the table. One of the sources noted that SoftBank’s decision to seek a U.S. listing for mobile payments firm PayPay prompted Rakuten to explore a similar route for its card business.

Rakuten has not publicly commented on the deliberations. The information, first reported by Reuters, sent Rakuten’s Tokyo-listed shares up 4.7 percent on the day, outperforming the Topix index, which gained 1.6 percent.

Financial profile of Rakuten Card

Founded in 2001, Rakuten Card has issued more than 30 million credit cards in Japan. The company reported non-GAAP operating profit of 62 billion yen (roughly US$415 million) in 2024, a 20 percent year-on-year increase. Profit fell 4.5 percent in the April-to-June quarter of 2025 as higher expenses offset revenue growth. Chief Executive Koichi Nakamura told investors in March that the unit aims to expand operating profit to 100 billion yen over the “medium term” by adding corporate clients to its largely consumer-focused portfolio.

Credit cards sit at the center of Rakuten’s ecosystem, which spans online retail, travel bookings, digital banking and mobile networks. Cardholders earn loyalty points that can be redeemed across those services, driving customer retention and cross-selling.

Previous investments set valuation floor

In 2024, Mizuho Financial Group purchased a 15 percent stake in Rakuten Card for 165 billion yen (about US$1.1 billion), implying a valuation above 1 trillion yen (US$7 billion). The deal also included a partnership to issue co-branded cards.

Analysts view the Mizuho transaction as a benchmark for any future capital raise. By comparison, institutional investors reportedly assign PayPay a baseline valuation of 2 trillion yen, with some forecasts exceeding 3 trillion yen when that company goes public, possibly as early as December.

Group strategy and balance-sheet goals

Rakuten, led by founder and Chief Executive Hiroshi Mikitani, has used equity sales to shore up finances after heavy spending on its mobile-network rollout pushed the parent company into losses. The group listed Rakuten Bank on the Tokyo Stock Exchange in 2023 and previously signaled an intention to float Rakuten Securities. Mizuho has injected funds into both the brokerage and card units, giving Rakuten time to stabilize the telecom business.

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A successful U.S. debut of Rakuten Card would diversify the company’s investor base and could provide capital for network upgrades or debt reduction. However, the sources cautioned that no timetable has been set and that market conditions will influence the final decision.

Market reaction and outlook

Investors welcomed the possibility of unlocking value from Rakuten Card, citing solid growth in Japan’s cashless payments segment. According to data from the Ministry of Economy, credit-card transaction volume in the country has risen steadily for the past five years as consumers migrate from cash to digital payments.

Regulatory hurdles for an overseas listing appear manageable. Companies headquartered in Japan have increasingly tapped U.S. exchanges to reach a broader pool of capital, although they must comply with both Japanese Financial Instruments and Exchange Act requirements and U.S. Securities and Exchange Commission rules.

For now, Rakuten is expected to monitor PayPay’s progress and overall market sentiment before making a formal filing. Should the IPO proceed, it would mark one of the largest public offerings by a Japanese fintech company in recent years.

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