Swedish fintech giant Klarna is negotiating with investment banks for an initial public offering (IPO) in the United States valued at $20 billion, Bloomberg reported, citing “people familiar with the matter.” Although official confirmation is still pending, the company is aiming for an IPO as early as the third quarter of 2024.
The report also stated that consultations were ongoing and details of the offer, including valuation and timing, could change.
A fair review?
Klarna was worth $45.6 billion in 2021. However, the following year the value fell to $6.7 billion as rising interest rates forced investors to reconsider supporting the online lending platform.
Klarna's attempt to go public in the US came as no surprise. Klarna CEO Sebastian Siemiatkowski had already revealed his plans to list the company in the US, saying: “This will happen fairly soon, but there are no official dates.”
Siemiatkowski further pointed out that the US is the ideal market for Klarna's IPO as it is the largest market in terms of sales with over 37 million customers. Additionally, he expressed less optimism about a European listing, as Sweden and the UK “are still very small compared to the US.”
Turn the tide with an IPO
Klarna Bank AB offers BNPL (Buy-Now-Pay-Later) services to retail customers. BNPL allows retail customers of any e-commerce platform to receive short-term credit for their purchases. The platform was founded in 2005 and offers loans to around 150 million buyers worldwide. According to its website, around 2 million transactions are processed daily in 45 countries.
Ahead of its possible IPO, the fintech is diversifying its offering by launching a subscription service with exclusive benefits. Klarna Plus, the subscription service, costs $7.99 per month.
The company had revenue of $1.85 billion and operating profit of $1.6 billion in 2022.
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