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Klarna has begun its long-awaited rise on the stock market following its acquisition by Sweden, while the postpaid pioneer said it has filed initial public offering documents in the United States.
The fintech company announced Wednesday that it has “confidentially filed” a draft registration statement with the U.S. Securities and Exchange Commission.
The initial public offering, which could value Klarna between $15 billion and $20 billion, will take place after an SEC review and its timing will depend on market conditions, the company added. Khurana said the price range and number of shares to be offered in the IPO have not yet been determined.
Klarna has been on a rollercoaster ride since trading in 2021, when it was valued at $46 billion, making it Europe’s most valuable startup. Its last official funding round in 2022 then valued it at $6.7 billion, as investors sharply revalued fintech companies in the wake of rising interest rates.
The company has also been plagued by deep governance rifts between two of its co-founders, CEO Sebastian Siemiatkowski and third-largest shareholder Victor Jacobson, and last month the latter This resulted in the representative of Klarna being dismissed from the Klarna board of directors.
The dispute exposed tensions over Mr. Jacobson and his allies buying the company’s stock on the secondary market and using special purpose instruments to oppose its leadership.
Siemiatkowski told the Financial Times more than a year ago that the company was ready for an IPO when market conditions allowed. Although widely expected, Klarna’s choice of the US for its IPO is a blow to European capital markets and follows a similar decision by Spotify, which chose New York to list in 2018.
The fintech industry has focused on expanding its operations in the U.S. in recent years, weighing on profits. The company is stepping up partnerships with US distributors to join buy now, pay later rival Affirm, and offloading £30bn worth of UK loans to hedge fund Elliott to boost capital I signed a contract to do so.
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Klarna has narrowed its losses over the past year and appears to be on track to return to annual profit. Mr. Simiatkowski touts the benefits of using artificial intelligence to reduce costs and promises to cut the company’s workforce by nearly half by leveraging it for customer service and marketing. A hiring freeze was also implemented for workers other than engineers.
Klarna’s IPO is likely to bring further scrutiny to the controversial ‘buy now, pay later’ space. Siemiatkowski touts the industry as a business that offers customers much lower fees than credit cards, but consumer groups and charities say the industry encourages people to take on additional debt they can’t afford. It is criticized for doing so.
Britain’s Labor government announced plans last month to regulate the sector as consumer credit, and the US Consumer Financial Protection Bureau announced earlier this year that BNPL should be regulated like credit cards.
