Klarna IPO: Buy Now, Pay Later Firm Revives Listing Plans

Klarna Revives IPO Plans with Up to $1.27 Billion Target

Klarna, the Swedish buy now, pay later (BNPL) company, along with its investors, is once again pursuing an initial public offering. The aim is to secure up to $1.27 billion through a listing that could value the firm at as much as $14 billion.

Share Offering Details

Approximately 34.3 million shares are being offered by the company and existing shareholders, priced between $35 and $37 per share. This information was detailed in an update to the company’s registration statement released on Tuesday.

Of the total shares, around 5.6 million will be sold by Klarna directly, generating proceeds for the company. Shareholders will be offloading approximately 29 million shares.

Listing Information

The company intends to list its shares on the New York Stock Exchange, utilizing the ticker symbol “KLAR.”

Past Valuation and IPO Delays

An IPO from Klarna had been anticipated for some time, driven by the substantial success of its BNPL model following the surge in demand after the pandemic. In 2021, just six years after its U.S. launch, the company reached a valuation exceeding $45 billion.

However, the IPO was postponed as market conditions shifted with the end of the zero interest rate policy (ZIRP) era. The company’s valuation subsequently decreased by 85% to $6.5 billion when the venture capital bubble of 2021 deflated.

Recent Financial Performance

Despite previous setbacks, Klarna has demonstrated positive growth. Second-quarter revenue increased by 54% year-over-year, reaching $823 million. This growth was supported by a 14% rise in gross merchandise value, totaling $6.9 billion.

While still reporting a net loss of $53 million, the company has improved its financial position, with the current loss being 42% lower than the $92 million net loss recorded in the same quarter last year.

Underwriters for the Offering

Goldman Sachs, JP Morgan, and Morgan Stanley are leading the offering. Additional banks involved in the deal include BoFA Securities, Citigroup, Deutsche Bank, Societe Generale, UBS, and others.