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- Buy-now, pay-later firm Klarna has filed draft registration documents for an IPO in the US.
- The Swedish firm has not confirmed the price range and number of shares it will offer.
- Klarna was once Europe’s most valuable startup but its valuation fell amid a wider market downturn.
Swedish fintech giant Klarna has filed documents for its highly anticipated initial public offering in the US.
Klarna announced Tuesday that it confidentially submitted draft registration documents to the Securities and Exchange Commission.
The buy-now, pay-later firm said it expects the IPO to take place once the SEC has completed its review, and the timing would be subject to market conditions. It added that the price range and number of shares it will offer have not yet been determined.
Klarna, which offers short-term financing to customers online and in stores at checkout, raised $1 billion in March 2021. Three months later, it raised a further $639 million at a $45.6 billion valuation, making it Europe’s most valuable startup at the time.
That same year, Klarna looked to capitalize on its rapid growth in the US as online shopping boomed during the pandemic. It started investing 10 times more in marketing in the US in 2021 compared with the two years prior, Business Insider previously reported, spending $5.5 million alone on a 30-second Super Bowl advert.
But its valuation fell to $6.7 billion in 2022 during a wider market downturn for startups. In February, Bloomberg reported that Klarna was in talks with banks to go public in the US at a $20 billion valuation.
Klarna’s public listing plans follow a period of muted tech IPO activity. It also continues a trend of IPO “brain drain” from Europe to the US, said Navina Rajan, senior EMEA private capital analyst at PitchBook.
“For Klarna more specifically, the choice falls in line with the company’s focus on US expansion,” Rajan added. “Furthermore, the less scrutiny on profitability for tech companies seen in the US may also help alleviate cost pressures caused by expansion.
“That being said, profitability is something that they have been cited to be near to achieving, which falls in line with broader trends we’re seeing in the nature of IPOs that are taking place.”
Klarna also appears to be seeking to expand beyond its core BNPL business. It recently advertised four internal jobs to help build a product that lets customers buy and sell stocks through its app.
The company posted on an internal Slack channel last month, seen by BI, that it is hiring a team to build a tool resembling Robinhood’s trading platform.
A spokesperson for Klarna told BI at the time that it “continuously explores new product concepts” and that it “does not mean that such a product will eventually go to market.”
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