Europe Has Its Silicon Valley Moment as Adyen Surges in Debut

Europe Has Its Silicon Valley Moment as Adyen Surges in Debut

A tech company skyrockets on its first day of trading, making its founder an instant billionaire and showering its venture capitalist backers with profits: it’s the stuff Silicon Valley dreams are made of.

But on Wednesday, it wasn’t a California startup that hit the jackpot — it was Adyen NV, a previously obscure Dutch fintech that processes payments for the likes of Netflix Inc. and Spotify Technology SA. Adyen’s shares more than doubled in its trading debut in Amsterdam before closing at a 90 percent gain, giving the company a market value of 13.4 billion euros ($15.8 billion) — more than Commerzbank AG, Germany’s second-biggest lender.

For the European tech scene, which has seen few initial public offerings of tech firms since the heyday of the dot-com boom two decades ago, a good dose of euphoria was suddenly in order.

“We need European tech companies to be IPO’ing, rather than abandoning their missions and selling out to American companies,” said Michael Jackson of Mangrove Capital Partners in Luxembourg. “This proves that there is an IPO route for European companies, not just an acquisition one.”

Few Sellers

About 25 top institutional investors got 75 percent of the deal, according to people familiar with the deal who asked not to be identified. Monday’s stock pop was also driven by the fact that trading was not very liquid, with few sellers on the secondary market relative to the amount of buyers.

The unexpected windfall demonstrates how hungry the marketplace is for alternatives to traditional European banks, many of which are still struggling to find their footing a decade after the financial crisis, let alone leading innovation. Yet Adyen’s IPO also raises important questions for investors, as well as entrepreneurs. For starters, is this a one-off, or the beginning of the long-heralded moment when a new breed of financial enterprise starts truly challenging the establishment?

There’s a good argument to make for the former. For 12 years, Adyen, which means “start over again” in Surinamese, has painstakingly built its business in the highly regulated payments industry with a combination of high-grade engineering and patience. Adyen made it easier and cheaper for merchants to process e-commerce payments as well as purchases made in stores, but it also provided them with tools to analyze payment data so they can tailor new offerings to their customers.

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