Japanese technology and e-commerce giant Rakuten Group is considering a potential U.S. initial public offering for its significant credit card division, Rakuten Card. According to sources familiar with the matter, these discussions are in the preliminary stages and represent one of several strategic options being evaluated to unlock value from the financial services unit.
The company is also reportedly exploring alternatives, including the sale of a stake to a strategic partner. This move follows a trend of Japanese financial technology firms looking toward U.S. markets for higher valuations and greater access to capital.
Key Takeaways
- Rakuten Group is in the early stages of considering a U.S. IPO for its Rakuten Card business.
- Other options, such as selling a stake to a strategic buyer, are also being considered.
- The move is partly influenced by competitor SoftBank's plans to list its payment operator, PayPay, in the U.S.
- In 2024, Mizuho Financial Group acquired a 15% stake in Rakuten Card, valuing the business at over $7 billion.
Strategic Options for Rakuten's Financial Arm
Rakuten began exploring options for its credit card unit in September 2025, according to two individuals with knowledge of the internal discussions. The considerations for a U.S. listing are not yet finalized, and the company is carefully weighing its next steps. One of the primary alternatives to an IPO is a partial stake sale, which would bring in a strategic investor and provide capital without the complexities of a public offering.
This evaluation comes as Rakuten continues to seek ways to finance its strategic initiatives, particularly after the significant capital expenditure required to launch its mobile network. The company has a history of spinning off its successful divisions to raise funds. Two years ago, it listed Rakuten Bank in a domestic offering on the Tokyo Stock Exchange.
Background: Rakuten's Capital Strategy
Rakuten Group, led by founder and CEO Hiroshi Mikitani, has been actively restructuring its finances. The company's entry into Japan's competitive mobile carrier market resulted in heavy losses, prompting it to monetize assets in its more profitable fintech ecosystem. This strategy has included listing Rakuten Bank and considering a public offering for Rakuten Securities before Mizuho Financial Group stepped in with a significant investment.
Following the report of a potential U.S. IPO, shares of Rakuten Group (4755.T) closed up 4.7%, outperforming the broader Topix index, which rose 1.6%. The company has not officially commented on the matter.
Competitive Pressures and Market Valuations
A key factor driving Rakuten's consideration of a U.S. listing is the competitive landscape in Japan's fintech sector. According to one source, the plans by rival SoftBank Group to list its popular payment application, PayPay, in the United States have directly influenced Rakuten's thinking.
PayPay is anticipated to achieve a significant valuation. Institutional investors have reportedly set a baseline valuation of 2 trillion yen (approximately $13.1 billion), with some expectations that it could surpass 3 trillion yen (around $19.7 billion). Such a high valuation for a competitor in the U.S. market makes an American IPO an attractive proposition for Rakuten Card.
U.S. IPO Market Attracts Global Firms
Companies worldwide are increasingly turning to U.S. stock exchanges to secure higher valuations and tap into a deeper pool of investor capital. According to data from Dealogic, the U.S. IPO market had its most active quarter in years during the third quarter of 2025, with companies raising a total of $24 billion through initial share sales.
The potential valuation for Rakuten Card is already substantial. In 2024, Mizuho Financial Group acquired a 15% stake in the business for 165 billion yen ($1.1 billion). This transaction implied a total valuation for Rakuten Card of more than 1 trillion yen, or approximately $7 billion at the time.
The Central Role of Rakuten Card
Rakuten Card is not just a standalone financial product; it is a critical component of Rakuten's extensive business ecosystem. The company, under Hiroshi Mikitani's leadership, disrupted Japan's traditional credit card industry by simplifying the application process and making cards accessible to a broader consumer base.
Today, the credit card business is deeply integrated with Rakuten's other services, which include:
- Online shopping (Rakuten Ichiba)
- Banking (Rakuten Bank)
- Travel services (Rakuten Travel)
- Securities brokerage (Rakuten Securities)
Customers are incentivized to use the Rakuten Card for payments across this network, earning loyalty points that can be redeemed for goods and services. This creates a powerful flywheel effect, increasing customer engagement and retention across all of Rakuten's businesses. The company has successfully issued more than 30 million credit cards in Japan, making it one of the country's largest issuers.
Financial Performance and Future Growth
Rakuten Card has demonstrated strong growth, although it has recently faced some headwinds. In the previous fiscal year, the division's non-GAAP operating profit increased by 20% to reach 62 billion yen. However, in the April-June quarter of this year, profit declined by 4.5% compared to the same period a year earlier, a drop attributed to rising operational costs.
Despite this recent dip, the company maintains ambitious goals for the unit. In March, Rakuten Card's incoming CEO, Koichi Nakamura, outlined a medium-term strategy to expand profits and grow its corporate client base.
"We aim to expand profit to 100 billion yen over the medium term and are looking to expand our business with corporate customers," Koichi Nakamura stated earlier this year.
Achieving this target will require further investment and strategic expansion. A successful U.S. IPO or a strategic stake sale would provide the necessary capital to pursue these growth initiatives, enhance its product offerings, and compete more effectively with rivals like PayPay both domestically and potentially internationally.
