Klarna, Europe’s most valuable fintech startup, confidentially files for US IPO

Klarna, Europe’s leading buy now, pay later (BNPL) fintech, announced Wednesday that it has confidentially submitted IPO documents to the Securities and Exchange Commission (SEC). The $15 billion Swedish payments company has yet to make its IPO prospectus publicly available, stating that the timing of the offering will depend on market conditions and the SEC’s review process.

This filing comes roughly a year after Klarna filed the paperwork for an IPO, during which it restructured to create a new holding entity in the U.K., setting the stage for its next growth phase.

“Klarna Group Plc today confidentially submitted a draft Registration Statement on Form F-1 to the Securities and Exchange Commission (the “SEC”) relating to the proposed initial public offering of its ordinary shares. The number of shares to be offered and the price range for the proposed offering have not yet been determined. The initial public offering is expected to take place after the SEC completes its review process, subject to market and other conditions,” Klarna said in a news release on its website.

Klarna, recently valued at around $15 billion, saw its peak valuation soar to $46 billion during the pandemic, fueled by a surge in fintech and e-commerce investments. However, the company’s valuation took a steep 85% cut in 2022 when it raised funds at a significantly lower $6.7 billion valuation.

The company’s major backers include SoftBank’s Vision Fund 2, Sequoia Capital, and Atomico, a London-based investment firm.

Klarna’s CEO, Sebastian Siemiatkowski, previously voiced concerns that Europe’s restrictive policies on employee stock options could drive talent toward U.S. tech giants like Google, Apple, and Meta. He highlighted the challenges in competing with American companies for top talent.

The IPO has been a long time coming. In February, Siemiatkowski hinted that a 2024 public listing was “not impossible” during an interview with CNBC’s Closing Bell. Klarna’s main competitor, Affirm, went public in 2021 and currently holds an approximate $18 billion valuation.

In August, Klarna reported turning a profit in the first half of the year, a promising sign for investors as it prepares to go public.

According to a report from CNBC, Klarna’s choice to pursue a U.S. listing is a blow to European stock exchanges, which have been actively working to retain local tech companies. The London Stock Exchange, for instance, has introduced reforms, allowing dual-class shares to make it easier for founders to retain control over their company’s direction.

Siemiatkowski previously kept his options open regarding the listing location, with London considered a possibility. However, in 2021, he indicated that the U.S. was likely a more favorable market, largely due to the increased visibility it offers.

Founded in 2005 by Sebastian Siemiatkowski, Niklas Adalberth, and Victor Jacobsson, Klarna was created to simplify online shopping with its BNPL model. With over 12 million active users each month and 55,000 daily downloads, Klarna has quickly become a leading provider in the BNPL space.