This is the value of Vipps

This is the value of Vipps

financial technology

It’s low, CEO Ron Garburg believes.

Director of Finance and Strategy Andreas Sastad and CEO Ron Garburg at FIPS lift the veil on the company’s valuation.

Excuse me The center is in Norway, and of course also in Denmark with MobilePay pervasive in this market, dominant, but also exposed to very stiff competition from Apple and Google wallet solutions.

It’s always hard to put a price tag on an unprofitable company, but the special situation surrounding Vipps makes it all the more demanding and interesting.

Phipps has so far refused to say what they think they deserve. And when Vipps’ MobilePay service and Danske Bank merged last year, and the new company received about half a billion NOK from the Norwegian owner banks, the valuation wasn’t easy to read.

Lighten the veil

Now Vipps itself is lifting the veil and saying that the value of the interbank deal was just under seven billion kronor.

Seven billion reflects the plans we have and the expected value creation that the owners believe we will achieve in the future, he says Andreas SastadDirector of Finance and Strategy at Vipps to Shifter.

– The owners of course expect that we will continue the growth rate at the level we are at now, especially in the field of e-commerce, says CEO Vipps Ron Garborgand points to the fact that the company generated transaction income growth of NOK 163 million last year.

A key piece of the puzzle is that Vipps Mobilepay is keeping to the schedule and hitting a common platform before 2023 is out.

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It’s the timeline that was announced, and Garborg currently sees no chance of changing it.

– A common platform will give us very strong synergistic effects. So far, we’ve spent most of our efforts enhancing the platforms. When this task is completed, there is also a clear expectation from the owners that we will come up with new products and services that will generate income, Garborg says and continues:

– As Andreas says, future income streams are the basis for the evaluation.

Vipp results in 2022

  • Vipps Annual Report 2022 shows total annual income of NOK 655 million, an increase of NOK 10 million from 2021.
  • Transactional income increased by NOK 163 million from 2021 to 2022. Distribution contribution from banks was reduced by NOK 153 million in the same period.
  • The annual result in 2022 for Vipps (without BankID and BankAxept) ended at minus NOK 450 million, compared to a loss of NOK 378 million in 2021.
  • The increase in the deficit is related to separation costs, merger costs, personnel costs, consultancy costs associated with the delayed process to obtain European Commission approval for the Vipps MobilePay merger.

Low rating

Garborg believes that the owner banks have a long perspective in terms of valuation of the company and that they have chosen to build the strategic position one stone at a time. From beginning as a free-to-a-friend payments service, to strengthening its position in e-commerce and today it is in a position where nearly half of all transactions going through Vipps generate income for the company.

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— When we get rid of the part of the cost picture caused by the merger, we’ll be able to see a solid evolution. The Nordic footprint provides greater opportunities for growth, and greater chances of success, says Garborg, adding:

– With that in mind, we think the rating is low, laughs.

By the end of 2022, Vipps MobilePay had 11 million users, more than 400,000 stores and online stores as providers, and more than 1 billion transactions in Norway, Denmark and Finland.

This will result in an estimated value of approximately NOK 630 per user.

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Hanisi Anenih

Hanisi Anenih

"Web specialist. Lifelong zombie maven. Coffee ninja. Hipster-friendly analyst."

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