Klarna, the Swedish buy now, pay later lender, has taken a significant step towards a public listing in the United States. The company filed its IPO prospectus on Friday, signaling its intent to go public on the New York Stock Exchange under the ticker symbol KLAR. This move comes as Klarna seeks to regain its footing after a tumultuous year that saw its valuation drastically reduced by 85%.
Founded in 2005, Klarna experienced a dramatic downturn in 2022 when its valuation fell to $6.7 billion during its most recent primary fundraising. This was a stark contrast to the $46 billion valuation it enjoyed in a previous SoftBank-led funding round. However, the company's fortunes appear to be on the mend, with analysts now estimating its valuation in the $15 billion range. This recovery is attributed to Klarna's return to profitability in 2023 and a robust revenue increase of 24% last year, totaling $2.8 billion.
The decision to pursue a U.S. IPO aligns with Klarna CEO Sebastian Siemiatkowski's longstanding hints that a U.S. listing was more likely. By listing on the New York Stock Exchange, Klarna aims to strengthen its presence in the competitive buy now, pay later sector, where it faces rivals such as Affirm and Afterpay. Headquartered in Sweden, Klarna's major shareholders include prominent venture firms like Sequoia Capital and Atomico, alongside SoftBank's Vision Fund.
In recent years, Klarna has faced challenges as it navigated the volatile fintech landscape. The company's decision to go public represents a strategic effort to rebuild and solidify its market position. As Klarna prepares for its IPO, it continues to focus on expanding its offerings and capitalizing on its return to profitability.