Klarna revives IPO plans, aims to raise $1.27B

Klarna, the Swedish buy-now, pay-later startup, is reigniting its plans for an initial public offering (IPO) with aspirations to secure up to $1.27 billion. This move could position the company with a valuation as high as $14 billion. In a recent update to its registration statement, Klarna disclosed that it, along with its shareholders, plans to sell around 34.3 million shares priced between $35 and $37 each. Of this offering, Klarna itself will benefit from the sale of approximately 5.6 million shares, while the remaining shares will be sold by its shareholders. The company intends to list its shares on the New York Stock Exchange under the ticker symbol “KLAR.” Klarna's anticipated public debut comes after a significant surge in demand for its BNPL services during the post-pandemic recovery phase. After entering the U.S. market six years ago, Klarna achieved a remarkable valuation exceeding $45 billion in 2021. However, the company has delayed its IPO plans due to fluctuating market conditions. Following the end of the zero interest rate policy (ZIRP) era, its valuation plummeted by 85%, dropping to $6.5 billion amid the collapse of the 2021 venture capital valuation bubble. Despite these challenges, Klarna has shown strong revenue growth, reporting a 54% increase to $823 million in the second quarter compared to the previous year. This growth has been fueled by a 14% rise in gross merchandise value, reaching $6.9 billion. Nonetheless, the company is still operating at a loss, reporting a net loss of $53 million, though this is a notable improvement from the $92 million loss recorded a year prior. The IPO is being managed by major financial institutions including Goldman Sachs, JP Morgan, and Morgan Stanley, with additional support from BoFA Securities, Citigroup, Deutsche Bank, Societe Generale, UBS, and several others.