Marqeta IPO Preview: The Thing Behind The Thing Providing Payment Cards For Large Customers

Benzinga routinely examines a stock that might be considered a little under the radar. The company may not be well-known, but chances are the line of work it’s in is pretty familiar. This is called the “thing behind the thing.”

Working behind the scenes for some of the most well-known brands to power payments could make Marqeta “the thing behind the thing.” The company aims to empowers its large customers to create customized payment cards for their customers and end users.

About Marqeta: The modern card issuing company Marqeta MQ will make its public debut this week with a planned listing of 45.5 million shares at a price point of $20 to $24.

Marqeta provides a platform powered by APIs that enable frictionless payment card experiences for its customers. Marqeta was the first company to offer a platform for modern card issuing, which could give it a key first-mover advantage.

The company’s customers include Affirm Holdings Inc AFRM, DoorDash Inc DASH, Instacart, Klarna and Square Inc SQ.

Marqeta has services in 36 countries and more than 320 million cards issued.

The Thing Behind The Thing: The filing from Marqeta highlights how the company could be the thing behind the thing.

“When you order food using DoorDash, or groceries using Instacart, modern card issuing works in the background as money moves from the app to the delivery driver’s payment card, allowing the driver to pay for exactly what you ordered and nothing else,” according to the company. 

“When you buy a big screen TV and pay for it in installments using Affirm or Klarna, modern card issuing helps move money to the payment card that Affirm or Klarna uses to seamlessly pay the merchant.

“When you receive money from your friend through Square’s Cash App, modern card issuing helps move the funds to your debit card, making it instantly available to you to make purchases.”

Prior to Marqeta and modern card issuing, the process was slow and complex. The company helps solve these problems using open APIs, which can help customers turn their focus to their core business and operations instead of having to worry about the behind the scenes processes.

Marqeta helps companies launch and manage card programs, issue cards to customers and authorize and settle transactions. That's how Marqeta is the thing behind the thing.

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Marqeta's Growth Projections: The company lists a total market size of $6.7 trillion of transaction volume through U.S. issuers, according to market data from The Nilson Report. Globally, over $30 trillion in volume is done annual across global card networks.

Euromonitor projects a market size of $74 trillion for global money movement in 2021 represented by over 4 trillion payment transactions.

Marqeta has fractional market share of less than 1% of the totals, which could position it well to capture additional growth in the market. Marqeta is a category leader in several of the card issuing segments including sectors like on-demand delivery, digital banks and expense management.

Growth initiatives for Marqeta include growing its existing customer base, increasing relationships with existing customers, expanding internationally, adding new products and services and expanding the company’s platform.

Marqeta's Financials: Revenue in 2020 totaled $290.3 million for Marqeta, up 100% year-over-year. The company's total payment volume was $60.1 billion, up 177% year-over-year.

Marqeta’s total payment volume was $24 billion in the first quarter of 2021, up 167% year-over-year.

First-quarter revenue for the company amounted to $108 million, up 123% year-over-year.

The company reported a net loss of $47.7 million in 2020  compared to a loss of $58.2 million in fiscal 2019.

See also: HOW TO BUY MARQETA IPO (MQ) STOCK