Klarna, the Swedish payment company known for its popular "Buy Now, Pay Later" services, has announced the filing of its initial public offering (IPO) documents with the U.S. Securities and Exchange Commission. The company has yet to determine the number of shares to be issued and the price range for the offering, as the timing will depend on market conditions. Analysts recently valued the company at approximately $15 billion, a significant drop from its peak valuation of $46 billion during the fintech boom driven by the pandemic.
The firm faced a valuation plummet of 85% in its first funding round in 2022, resulting in a valuation of $6.7 billion. Klarna's major investors include notable firms such as SoftBank's Vision Fund 2, Sequoia Capital, and Atomico. CEO Sebastian Siemiatkowski has expressed concerns about Europe's unfavorable stock option regulations potentially leading to a talent drain to U.S. tech giants like Google, Apple (AAPL, Financial), and Meta.
Siemiatkowski views employee compensation as a primary risk factor for the company, a common element disclosed in IPO filings. The IPO plans have been considered for some time, with suggestions earlier this year that a 2024 listing was possible. In August, Klarna reported turning profitable in the first half of this year, reversing from losses in the previous year as the company approaches its anticipated public offering.
Klarna's decision to list in New York represents a setback for European stock exchanges, which have been trying to attract local tech giants to list domestically. The London Stock Exchange, for instance, has implemented reforms to attract tech firms, such as allowing founders to issue dual-class shares to retain control over company strategy and direction.
Siemiatkowski had considered London among potential venues for Klarna's listing but emphasized the U.S. as a more likely choice due to its high-growth potential and the opportunity to enhance brand recognition.
