Klarna Is in Talks with US Banks for IPO at $20 Billion Valuation

by Arnab Shome
  • The fintech is reportedly aiming to go public in Q3 2024.
  • At its peak in 2021, it was valued at $45.6 billion, then plummeted to $6.7 billion.
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The Swedish fintech giant Klarna is discussing with investment banks for a United States initial public offering (IPO) at a valuation of $20 billion, Bloomberg reported, citing “people familiar with the matter.” Although official confirmation is yet to come, the company is targeting a public listing as soon as the third quarter of 2024.

The report outlined that deliberations are still ongoing and details of the offering, including valuation and timing, could change.

A Fair Valuation?

Klarna was valued at $45.6 billion in 2021. However, the valuation tumbled to $6.7 billion the following year as rising interest rates forced investors to reconsider backing the online lending platform. Klarna’s attempt to go public in the US did not come as a surprise. Sebastian Siemiatkowski, the CEO of Klarna, had already revealed his plans to take the company public in the US: "This is going to happen quite soon, but there are no official dates.”

Siemiatkowski pointed out that the US is the ideal market for Klarna to go public, as it is its largest market by revenue, with over 37 million customers. He additionally sounded less bullish towards a European listing, as Sweden and the UK “are still very small compared to the US one.”

Turning the Tides with an IPO

Klarna Bank AB offers buy-now-pay-later (BNPL) services to retail clients. With BNPL, retail customers of any e-commerce platform can receive a short-term credit for their purchases. The platform was founded in 2005 and offers credit to about 150 million shoppers globally. According to its website, it handles around 2 million daily transactions across 45 countries.

Ahead of its potential IPO, the fintech is diversifying its offerings by launching a subscription service offering exclusive perks. Klarna Plus, the subscription service, is $7.99 monthly. The company generated $1.85 billion in revenue in 2022 with an operating income of $1.6 billion.

The Swedish fintech giant Klarna is discussing with investment banks for a United States initial public offering (IPO) at a valuation of $20 billion, Bloomberg reported, citing “people familiar with the matter.” Although official confirmation is yet to come, the company is targeting a public listing as soon as the third quarter of 2024.

The report outlined that deliberations are still ongoing and details of the offering, including valuation and timing, could change.

A Fair Valuation?

Klarna was valued at $45.6 billion in 2021. However, the valuation tumbled to $6.7 billion the following year as rising interest rates forced investors to reconsider backing the online lending platform. Klarna’s attempt to go public in the US did not come as a surprise. Sebastian Siemiatkowski, the CEO of Klarna, had already revealed his plans to take the company public in the US: "This is going to happen quite soon, but there are no official dates.”

Siemiatkowski pointed out that the US is the ideal market for Klarna to go public, as it is its largest market by revenue, with over 37 million customers. He additionally sounded less bullish towards a European listing, as Sweden and the UK “are still very small compared to the US one.”

Turning the Tides with an IPO

Klarna Bank AB offers buy-now-pay-later (BNPL) services to retail clients. With BNPL, retail customers of any e-commerce platform can receive a short-term credit for their purchases. The platform was founded in 2005 and offers credit to about 150 million shoppers globally. According to its website, it handles around 2 million daily transactions across 45 countries.

Ahead of its potential IPO, the fintech is diversifying its offerings by launching a subscription service offering exclusive perks. Klarna Plus, the subscription service, is $7.99 monthly. The company generated $1.85 billion in revenue in 2022 with an operating income of $1.6 billion.

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