New BlackRock Investment Values Trustly at over $1 Billion
Trustly continues to take the world by storm–recently announcing that it has received new investment from U.S. firm BlackRock. The agreement follows reports that the Sweden-based company had revenues of $150 million last year and an estimated value of over $1 billion.
Citigroup Global Markets Limited also took part in the transaction, acting as a financial advisor.
In a press release, Trustly CEO Oscar Berglund did not disclose the exact amount of the investment but did discuss the reasons for the agreement:
We welcome BlackRock and the other investors as minority shareholders in Trustly. With their support, we will double-down on developing the online banking payment solution that our merchants and billers and their customers love.
Despite remaining vague about the value of the investment, it is safe to assume that it must be in the hundreds of millions.
BlackRock, founded in 1988, is a global investment manager and technology provider that aids investors in a variety of industries. It also leads a big group of institutional investors that includes Aberdeen Standard Investments, Neuberger Berman, RSIC, and the investment corporation of Dubai.
Trustly was acquired by Nordic Capital in 2018 for $794 million before merging with U.S. rival PayWithMyBank last year. The move gave the firm access to Trustly’s lucrative merchant list that includes Facebook, AT&T, PayPal & TransferWise. Recently, they also partnered with iGaming site Betzest.
COVID-19 is accelerating the development of secure online payments
Trustly’s astounding rise is another example of the rapid development that is occurring within the e-commerce industry due to the coronavirus pandemic. As more people are shopping online due to the social distancing measures that have been enforced in many countries, the industry is naturally booming. WorldRemit, another digital transfer company, has reported that the COVID-19 pandemic compounded their double-digit growth in the run-up to the outbreak of the virus.
For a variety of reasons, merchants and customers are turning away from traditional online payment methods, such as credit cards, and are instead looking towards bank-based payment options like Trustly’s Pay ‘n’ Play solution for online gambling websites.
There are plenty of horrors stories surrounding traditional payment methods like fraud, stolen credentials, and hacking. Trustly has a severely reduced susceptibility to these risks because of its innovative network feature that sees payment go through a customer’s own bank interface, which usually has far more robust security features such as two-factor authentication.
Another reason for the rising success of bank-based transfer options is that they typically offer far better customer control than traditional payment options. So-called “challenger apps”, such as Monzo, Revolut, and Yolt, are increasing the pressure to provide a more user-friendly banking experience with customers expecting more enhanced controls over their finances. Credit cards (and to a certain extent debit) are the opposite of this, encouraging people to spend more money through various aspects of their design.
The cashless payments markets is another industry reaping rewards from the so-called ‘new normal’ that the coronavirus has caused. Hygienic concerns over the handling of physical money have seen more than one in four U.S businesses report an increase in contactless payment systems, according to the Electronic Transactions Association.