Klarna files for long-awaited U.S. IPO

Chana R. Schoenberger

Klarna's public listing got a bit closer on Friday as its prospectus filing with the Securities and Exchange Commission was made public.

The Swedish payments company confidentially listed with the SEC in November, and on Friday announced it reported a net profit of $21 million in 2024, compared to a loss of $244 million the prior year. Klarna has applied to list on the New York Stock Exchange under the ticker KLAR. 

Investors have anticipated Klarna's IPO for several years. The listing could signal a recovery in the broader payments technology market, which slumped in 2022 and 2023 following a fintech bubble during the Covid-19 pandemic's rush to digital commerce. Klarna did not comment, citing a quiet period. Bloomberg reported Klarna hopes to raise about $1 billion with a valuation of about $15 billion. Trading data that Rainmaker Securities shared with American Banker earlier this month projected Klarna's valuation at about $15.8 billion. 

Payments

Klarna's IPO tests the strength of BNPL

November 18, 2024 4:37 PM

The payment company's IPO, which could happen in about a month, comes amid a volatile period in the stock market. Market indices have plummeted in recent weeks in response to tariffs from the Trump administration. 

Klarna, which launched in Sweden in 2005 and in the U.S. in 2015, had a valuation as high as $45 billion in 2021, falling to as low as $6.5 billion in 2022.The company's recovery strategy included adding retail banking services such as savings accounts in the U.S. and parts of Europe.

Klarna, which has a banking license in the EU, is well-known as a buy now/pay later lender in North America. As it ramped up its U.S. strategy, Klarna partnered with payment technology firm Adyen, which is active in both the EU and the U.S. It additionally partnered with Apple to integrate Klarna's payment products with Apple Pay's checkout. Other partnerships with Staples, Worldpay and RiteAide followed.

In February, Klarna signed a deal with JPMorgan Chase to offer BNPL to the bank's merchant network. That put Klarna's installment options at the point of sale for more than 900,000 businesses through the bank's JPMorgan Payments Commerce Solutions Platform. Rainmaker Securities' note said the JPMorgan Chase partnership will "move the needle," noting the announcement came during Klarna's IPO roadshow. Klarna's recent strategy has included aggressively investing in new forms of artificial intelligence, contending that 96% of its employees use generative AI.

Additionally, Klarna's filing says its AI assistant performs the equivalent work of 800 staffers, saving more than $39 million in the past year. AI-supported marketing saved another $200 million. 

Klarna in the past has also said it would no longer hire staff outside of engineering roles due to the impact of generative AI. The company has reduced headcount by more than 30% over the past two years, currently employing about 4,000 people. Klarna's listing reported gross merchandise volume of $105 billion in 2024, up from $53 billion in 2020 and $6 billion in 2015. 

In an early March research note, Jeffries said Klarna's downloads have been increasing in the past year, making the firm a competitive threat to PayPal's strategy to boost branded checkout.