Trustly, a Swedish fintech firm backed by BlackRock Inc ( BLK ). has reported a 51% increase in operating profit for 2023. Despite this, CEO Johan Tjarnberg stated that an IPO is at least two years away.

What Happened: Trustly’s revenue for 2023 reached $265 million, with significant growth in the second half of the year. Transaction volumes spiked 48% during this period. Tjarnberg attributed much of this growth to the company’s U.S. operations, which expanded significantly after merging with PayWithMyBank in 2020.

However, the CEO emphasized the need for more time to demonstrate the value of Trustly’s open banking technology to investors, CNBC reported on Thursday.

“We need another year or two to really demonstrate to the market that open banking is happening, it’s here, ” Tjarnberg said.

Trustly’s technology allows consumers to make payments directly to merchants’ bank accounts, bypassing traditional card issuers like Mastercard and Visa. This has made it an attractive option for merchants looking to reduce transaction fees.

Trustly is majority-owned by venture capital firm Nordic Capital, with other significant stakeholders including Alfven & Didrikson and BlackRock ( BLK ). It is used by more than 9,000 merchants worldwide including Facebook, Alibaba, PayPal, eBay, and Lyft.

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Why It Matters: The timing of Trustly’s IPO is influenced by several factors. The upcoming U.S. Presidential Election in 2024 is expected to impact the IPO market significantly. Historically, election years have seen a slowdown in IPO activities due to market uncertainties and investor caution.

Furthermore, the banking sector is undergoing rapid transformation driven by advancements in technology. According to Moody’s Analytics, the banking industry stands to gain the most from the development of generative AI. This technological shift underscores the importance of innovation in fintech, making Trustly’s open banking technology particularly relevant.

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Image: Shutterstock/ StockEU

This story was generated using Benzinga Neuro and edited by Pooja Rajkumari