The next big payments IPO could be a fast-growing startup not named Stripe

Adyen doesn’t have the celebrity-status CEO of Square or the Silicon Valley reputation of Stripe. But it is another big, fast-growing payments business — and a profitable one at that.

That combination should make it a likely IPO candidate over the next two years.

The Amsterdam-based company announced on Wednesday that gross revenue grew 99 percent in 2016 to $727 million. After taking out transaction costs, net revenue was $178 million in 2016, a 65 percent increase over the prior year, CFO Ingo Uytdehaage told Recode in an interview.

The 10-year-old company also boasts significant profits for a payments business with a fast-growing top line — and has been profitable since 2011. The company’s earnings before interest, taxes, depreciation and amortization — a measure of operating profit — grew from $46 million in 2015 to $87 million in 2016 (excluding a one-time gain from the sale of a stake in another company).

Payments businesses typically grow fast with small profits, like Square, or slowly with large profits, like Worldpay. It’s difficult to do both at the same time.

“We’re benefitting from economies of scale at the moment,” Uytdehaage said. “Our main cost is the cost of our team, and that’s not growing as much as our [payments] volume or revenue. So long term, we expect Ebitda to increase faster and as a percentage of net revenues.”

Adyen was founded in 2006 and in recent years has made a name for itself by handling online payments for big global customers such as Netflix, Spotify and Uber that want to use one payments platform that can work in several regions of the world.

But Adyen continues to court physical retailers, too, and sell them on the advantages of being able to use a single payments service to manage both online and in-store orders in one place. Bonobos, a seller of men’s clothing that started online but now has more than 30 brick-and-mortar showrooms, is a client. Adyen has more work to do on this front.

Still, its financial results make it an attractive IPO candidate. Uytdehaage, the CFO, says the company is not engaged in that process just yet.

“We are still relatively at the start of our long-term journey and we would like to add more volume on the platform first to become a really significant player,” he said. “And there is no real need for a liquidity event.” The company has raised more than $250 million from Index Ventures, General Atlantic and Iconiq Capital.

But if you ask around enough, it’s easy to find smart industry insiders who say they would be surprised if Adyen didn’t go public in 2018. And then it’ll be a name more people know.

This article originally appeared on Recode.net.

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