Rakuten Mulls U.S. IPO for Credit Card Unit Amid SoftBank Moves

Introduction

Japanese internet and fintech group Rakuten is reportedly considering a U.S. IPO or stake sale for its credit card arm, a move aimed at boosting valuation and aligning with broader fintech listings. The consideration comes amid mounting pressure from rival SoftBank, which is pushing to list its PayPay payments business in the U.S. If realized, Rakuten’s plan would mark a major shift in its capital market orientation and give its financial services arm greater access to global investors.

The Proposal: What’s Under Consideration

Rakuten’s deliberations around the U.S. IPO are still in early stages. According to sources, the company is weighing alternative routes, such as a direct U.S. listing or selling a stake to a strategic investor.

One catalyst is SoftBank’s ambition to list PayPay in the U.S., which may force Rakuten to respond to avoid being left behind in global fintech markets.

Rakuten’s credit card business, Rakuten Card, is a central part of its broader ecosystem, connecting e-commerce, banking, loyalty programs, and consumer finance. The unit issued over 30 million cards and saw its non-GAAP operating profit grow by about 20 percent last year.

Mizuho Financial previously acquired a 15 percent stake in the unit, valuing it above USD 7 billion (~1 trillion yen).

Why a U.S. Listing Makes Sense

Access to Deeper Capital

U.S. capital markets offer broader investor reach and potentially richer valuations for tech/Fintech businesses than domestic listings in Japan.

Signaling & Competitive Parity

With SoftBank pushing PayPay in the U.S., Rakuten may need the listing to remain competitive and retain investor interest in its financial services arm.

Unlocking Hidden Value

By separating and listing its credit card business, Rakuten could unlock value that is otherwise bundled in its broader e-commerce and telecom operations.

Institutional Credibility

A U.S. IPO carries prestige and could facilitate cross-border partnerships, M&A, or credit access for future expansion.

Risks & Constraints

• Regulation & Disclosure Demands
  Listing in the U.S. means adapting to U.S. SEC rules, disclosures, compliance burdens, and investor scrutiny.
• Timing & Market Conditions
  Market volatility or weak IPO windows could derail plans or lead to undervaluation.
• Execution Complexity
  Carving out the business, aligning financials, and ensuring clean operational boundaries is nontrivial.
• Valuation Sensitivity
  Investors will closely scrutinize growth trajectory, credit performance, default rates, and regulatory risk, particularly in consumer finance.
• Strategic Pushback
  Some stakeholders or business units may resist structural changes or spin-offs that weaken integration.

What Happens Next

• Board & advisory decisions: Rakuten’s board will likely weigh IPO structuring, timing, and route (direct listing vs underwriting).
• Partnership or cornerstone investor talks: A strategic investor could attract stability or credibility as part of the IPO process.
• Regulatory filings & due diligence: Preparation for U.S. registration (e.g. SEC S-1) and audit cleanup will be monitored.
• Market reaction & investor sentiment: Equity moves will signal how the market views the potential separation and growth prospects.

Conclusion

Rakuten may be gearing up for a bold financial move by planning to weigh a U.S. IPO or stake sale of its credit card unit, Rakuten Card. Influenced by SoftBank’s PayPay U.S. listing push, the strategy could unlock hidden value, global exposure, and competitive positioning. But it carries high execution risk and timing sensitivity. The core theme: as Japanese fintechs turn global, separating structural value domestically may no longer suffice.