Klarna Lines Up Banks for Long-Planned US Listing

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Swedish payments fintech Klarna is seeking financial advisers for a highly anticipated initial public offering in the United States that will be among the most anticipated in recent years, according to people familiar with the matter.

Morgan Stanley, JPMorgan and Goldman Sachs were said to be in key positions to secure top roles in the potential listing of the buy-now-pay-later pioneer, sources said.

An IPO could come as early as the first half of next year, the people said, cautioning that no final decisions have been made. Other banks could still join the underwriting group, they added.

Clarify It was last valued at $6.7 billion in 2022 in a fundraising round that was heavily discounted amid rising interest rates and falling tech stock prices. It was previously valued at $46 billion in a 2021 deal that made it Europe’s most valuable startup group.

The dramatic valuation reduction has made Klarna a poster child for the crisis in the once booming fintech sector and investors’ growing focus on profitability over growth. The company, which has embarked on an expensive expansion plan, posted its fifth consecutive annual loss last year.

The company’s decision to seek a listing comes as Klarna executives and its advisers were confident that IPO Market will recover in 2025 after years of turbulence, two people familiar with the matter said. A company representative declined to comment.

Sebastian Siemiatkowski, co-founder and chief executive of Klarna, told the Financial Times last year that the fintech company had all the credentials to go public, including a sustainable business model and room for growth, but was waiting for better market conditions.

“From an IPO perspective, the requirements have been met,” he said. “So now, it’s more about market conditions. It’s more about getting ready and preparing.[ing] the organization. We don’t have an official date; we haven’t announced anything.”

It is not yet clear what valuation the company might seek in an IPO.

Klarna’s backers include its largest investor, Sequoia Capital, along with others such as Japan’s SoftBank, Bestseller Group and Abu Dhabi’s sovereign wealth fund Mubadala.

Founded in 2005, Klarna allows customers to spread payments or split them into installments through short-term, interest-free loans.

Credit losses increased in the first quarter this year, as it pursues aggressive expansion plans in the United States and consumers continue to struggle with inflation.

Advised

Klarna had been consistently profitable until 2019, when it decided to take some credit losses to pursue its growth plans in the United States.

At the beginning of this year Klarna was at center of a boardroom conflict involving major investor Sequoia Capital. At the heart of the dispute was tension over the influence of certain shareholders on Klarna’s corporate governance.

Representatives for Morgan Stanley, Goldman Sachs and JPMorgan declined to comment.

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