FinTech News
Swedish “Buy Now, Pay Later” Platform Klarna Announces IPO
Klarna’s plans to launch an American initial public offering have taken a major step forward.
What’s happening:
This week, Klarna announced that it had submitted a draft Registration Statement to the Securities and Exchange Commission (SEC) relating to a proposed initial public offering. Previously, the Swedish FinTech had been rumored to be eyeing an IPO, but this latest news makes it official. However, at this time, the number of shares that will be offered is not yet known. Similarly, a price range for the proposed shares has not been determined. Further details about the IPO are expected to be revealed once the SEC completes its review process.
About Klarna:
Klarna is a “buy now, pay later” (BNPL) platform that allows consumers to finance select purchases with no interest. Originally, the company allowed customers to pay off purchases over the course of four payments happening two weeks apart, with the first payment due upfront. However, the service has expanded and now also offers an “up to 30 days” option where shoppers can complete their transaction and pay within 30 days after placing their order with no upfront payments or interest.
According to Klarna’s site, it currently has more than 85 million active users and supports over 575,000 retailers. Recently, the service also gained an integration with Apple Pay. This option — which is available for Apple devices running iOS 18 or later — was added after Apple elected to sunset its own BNPL offering, Apple Pay Later.
Over the years, Klarna has raised a total of $4.5 billion in funding (according to Crunchbase) and has seen its valuation fluctuate. At one point, the company was valued at $45.6 billion, but that fell to just $6.7 billion with a 2022 funding round. More recently, Chrysalis Investments valued Klarna at $14.6 billion while increasing its stake in the FinTech.
My thoughts:
Klarna’s U.S. IPO feels as though it’s been a long time coming. As mentioned, the platform has seen some major swings in its valuation, which could certainly have an impact on its market viability. Yet, at least one investor (Chrysalis) seems to be pretty bullish on the service’s prospects, so it must have something going for it.
Personally, I’ve never been a fan of BNPL — and, honestly, feel as though its moment in the sun has passed. Maybe that’s more a sign that it’s become ubiquitous and is continuing to thrive, but the drop in Klarna’s valuation would suggest that I may be onto something in thinking that its “best days” are behind it. Of course, as a public company, Klarna will need to continue to innovate and grow, so I’d be interested to see what ideas it comes up with as it presumably looks to diversify its financial offerings.
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