CareCredit - Women's Health April 2024

Report: Klarna Aims for Q3 IPO, $20 Billion Valuation

Klarna

Klarna, the Swedish FinTech company once crowned as Europe’s most valuable startup, is reportedly in discussions with banks for a potential U.S. initial public offering (IPO) valued at $20 billion.

The company, known for its buy now, pay later (BNPL) services, is considering listing as early as the third quarter of this year, Bloomberg reported Tuesday (Feb. 27), citing unnamed sources. 

The talks are ongoing, and the valuation and timing could change, according to the report.

Reached by PYMNTS, a Klarna spokesperson declined to comment on the report.

Founded in 2005, Klarna has become a leader in offering credit to 150 million shoppers worldwide, handling around 2 million transactions per day across 45 countries, according to the report.

With its largest market being the United States, where it boasts over 37 million customers, Klarna has been profitable in the U.S. for four consecutive quarters, the report said. 

The potential IPO comes after a turbulent few years for Klarna, which saw its valuation drop from $45.6 billion in 2021 to $6.7 billion in 2022 due to investor concerns about rising interest rates impacting online lending platforms, per the report. 

Despite these challenges, Klarna reported in January that it had achieved its first profitable quarter overall, according to the report.

Speculation is also rife about Klarna potentially exploring listings in the United Kingdom or in its home market of Sweden, the report said, adding that the company set up a new U.K. holding company in a move some observers saw as preparation for an eventual listing.

Klarna CEO Sebastian Siemiatkowski has hinted at a U.S. IPO happening “quite soon,” marking a significant milestone for the FinTech giant, per the report.

PYMNTS Intelligence has found that people using BNPL are satisfied with these options, are favoring them and are incorporating them into their financial choices.

Fifty-three percent of consumers have increased their use of deferred payment installment plans compared to a year ago, according to “Tracking the Digital Payments Takeover: What BNPL Needs to Win Wider Adoption,” a PYMNTS Intelligence and AWS collaboration.

The report also found that this growing trend among consumers has led BNPL providers to discover unexpected success in categories they may not have initially anticipated.