Klarna Group, Europe’s leading payment solutions disrupter, is exploring a secondary share sale ahead of its 2025 initial public offering in the US. Backed by Sequoia Capital and Softbank, the 19-year-old company is currently in talks with investors to assess the level of interest; Goldman Sachs, Morgan Stanley, and JPMorgan are reportedly advising.
Stockholm-based Klarna is believed to have a valuation of about $20 billion in advance of the IPO. Its status as a rising star in Europe’s fintech firmament took it to a valuation of $31 billion in March 2021, increasing to $45.6 billion in July of that year. The huge uptick was driven by a 40% growth in revenue to $1 billion in 2020 and made Klarna Europe’s most valuable startup. Revenue leveled off as the Covid-19 pandemic waned and normal commerce was slowly restored, however, Klarna’s valuation subsided to $6.7 billion in July 2022.
The planned listing will shape the next phase in Klarna’s global expansion. The US has become Klarna’s single biggest market by revenue for its buy-now-pay-later payments concept. Its core online and digital payment solutions are developed and tested in-house through Klarna Bank, a lender fully licensed by Sweden’s Financial Supervisory Authority since 2017 and active in 45 markets.
The bank supports the parent company’s artificial intelligence-powered global payments network and shopping assistant business models. Klarna’s network comprises 550,000 global retailers and leading brands including Uber, Airbnb, H&M, Sephora, Macy’s, and Nike. Thus far, CEO Sebastian Siemiatkowski has taken a cautious and pragmatic approach to the IPO; market conditions had to improve first, he told reporters last year. The US IPO is now expected to proceed either in the first or second quarters, and observers expect it to be one of 2025’s largest debuts.