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Klarna scored a valuation just over $15bn in its US initial public offering, a major milestone for the Swedish fintech company after tariff-driven market volatility halted its previous attempt to go public.
Klarna priced its shares at $40, above the $35 to $37 marketing range outlined earlier this week, said a person familiar with the matter. They added the company raised just less than $1.4bn in an offering that was roughly 26 times oversubscribed.
At $40 a share, Klarna is valued at about $15.2bn. Shares are to begin trading on Wednesday.
The payments group was one of several companies that paused plans to float earlier this year after US President Donald Trump’s sweeping tariffs announcements in early April roiled markets.
The US IPO market has warmed up in recent months as market volatility has receded, with design software maker Figma and cryptocurrency exchange Bullish both raising more than $1bn. Gemini, the crypto exchange run by the Winklevoss twins, is set to debut later this week.
Klarna pioneered so-called buy now, pay later interest-free instalment loans through retailer checkouts. The loans have gained popularity in recent years as the company has grown in the US.
A successful listing would represent a milestone for the 20-year-old European fintech, which in recent years survived a governance crisis and experienced large fluctuations in investor sentiment.
Klarna’s valuation crashed from $46bn in 2021 — after a SoftBank-led investment round made it Europe’s most valuable start-up — to $6.7bn a year later as rising interest rates halted lofty investments in lossmaking start-ups.
Last year, the Sequoia-backed company reckoned with a year-long boardroom tussle that culminated with the ousting of a key ally of co-founder Victor Jacobsson from its board.
Klarna was regularly profitable until 2019, when it embarked on a costly push into the US and deliberately accepted heavy losses while it was fine-tuning its underwriting.
Its business model has faced backlash, with sceptics arguing its lending encourages reckless borrowing from vulnerable customers. Fears the US could tip into a recession have also clouded sentiment around its credit quality and how it might fare in a downturn.
Although Klarna primarily makes money by collecting fees from retailers, consumer advocates say “buy now, pay later” has predatory characteristics because it charges penalties to customers who fail to pay their instalments on time.
According to its IPO filing, 13.6 per cent of Klarna’s revenue last year came from “reminder fees” and “snooze fees” that customers incur when they miss a deadline or choose to defer payments.
Klarna is also seeking to diversify away from being a pure BNPL player and become a full-fledged digital bank. It recently launched a debit card and is growing its traditional interest-bearing loans, while chief executive Sebastian Siemiatkowski has touted its ambitions to get into crypto.
The company reported a net loss of $53mn for the three months to June, up from a net loss of $18mn a year earlier. Its quarterly revenue rose almost 21 per cent year on year to $823mn.
Last year, Klarna posted a net profit of $21mn, up from a loss of $244mn the previous year.
Still, the $15bn valuation puts Klarna’s market cap far below that of US rival Affirm, which listed in 2021 at a $12bn valuation and now has a market value of $29bn.
Still, the relatively low pricing could give the stock a “pop” when it starts trading on Wednesday. Shares in Figma and Bullish have tumbled since surging on their market debuts.
Additional reporting by Richard Milne
