Klarna’s Upcoming $1 Billion IPO: What You Need to Know

(Bloomberg) — Klarna, the prominent payments business, is gearing up to raise at least $1 billion through a US initial public offering (IPO) and is expected to file publicly as soon as next week, according to sources familiar with the situation. The company aims to price the IPO in early April, with a target valuation exceeding $15 billion on the New York Stock Exchange.

Details of the IPO Filing

While discussions are ongoing, the specifics of the listing plan, including timing, may still change. A representative for Klarna has declined to comment on the matter. The company is widely recognized for its buy-now, pay-later (BNPL) loans, which allow users to make purchases and split payments into equal, interest-free installments.

Klarna’s Global Reach

With a customer base of 85 million worldwide and partnerships with 600,000 retail outlets, Klarna has established itself as a leader in the fintech sector. The company had previously filed confidentially for an IPO with the US Securities and Exchange Commission, as noted in a statement from November.

Banking Partnerships and Market Impact

Klarna is collaborating with approximately 15 banks for the IPO, with major players like Goldman Sachs Group Inc., JPMorgan Chase & Co., and Morgan Stanley leading the charge. This listing is anticipated to invigorate technology IPOs, which have experienced a downturn following record volumes in 2021. Other fintech firms, such as Chime Financial Inc. and Zilch Technology Ltd., are also contemplating their own initial share sales this year.

Valuation Fluctuations

Klarna’s valuation has seen significant fluctuations in recent years. It peaked at $45.6 billion during a funding round in 2021, only to drop to $6.7 billion in a subsequent round the following year. Analysts estimated its valuation at around $14.6 billion last year, based on the worth of its stake held by shareholder Chrysalis Investments Ltd.

Future Plans and Innovations

Chief Executive Officer Sebastian Siemiatkowski recently indicated that Klarna is exploring expansion into the cryptocurrency market. On February 8, he expressed his commitment to embracing crypto on social media platform X, stating, “I give up.”

Company Evolution and Strategic Moves

Founded 20 years ago in Stockholm, Sweden, Klarna has been preparing for its public offering by establishing a new UK holding company in 2023. The company has refocused its strategy, shedding non-core businesses, prioritizing payment partnerships, and investing in artificial intelligence technologies.

Recent Developments

In recent months, Klarna has divested its Checkout payments business for approximately $520 million and acquired Laybuy, a provider of buy-now, pay-later services in New Zealand. These strategic moves reflect Klarna’s commitment to streamlining operations and enhancing its market position.

As Klarna approaches its IPO, the fintech landscape is closely watching its developments. The anticipated public offering could signal a resurgence in technology IPOs, providing a much-needed boost to the sector.

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