Shares in Klarna Group PLC closed up 14.55% in regular trading today after the Swedish fintech company made its debut on the New York Stock Exchange.
In its initial public offering, Klarna offered around 34.3 million shares at $40 each. The shares opened at $52 each before surging to a high of $57 before closing the day at $45.82.
Founded in 2005, Klarna offers a Buy Now, Pay Later solution that allows consumers to make online purchases and pay for them in installments, often with no interest over a short period, such as with its “Pay in 4” model. Klarna acts as an intermediary, paying the merchant upfront and then managing consumer payments, effectively removing risk for both parties and simplifying the checkout process.
In addition to BNPL offerings, Klarna provides a suite of payment processing services for e-commerce merchants, handling customer payments, managing store claims and disputes. Since obtaining a banking license in Sweden in 2017, the company has also offered broader fintech offerings, including issuing physical and digital cards, providing savings accounts and offering subscription based services.
In its IPO filing in March, Klarna said that more than 675,000 merchants have adopted its service to date and that those companies use Klarna to process payments for 93 million customers. The platform’s gross merchandise value, the combined dollar value of the transactions it processes, reached $105 billion last year.
Klarna’s revenue was up 24% year-over-year to $2.81 billion in 2024, with the company also generating $21 million in net income.
As reported by Bloomberg, the company’s closing price gives Klarna a market value of more than $17 billion, based on outstanding shares, a not unreasonable figure but notably down from a valuation of $45.6 billion the company reached on paper in a round of $639 million in June 2021 during the COVID-19 online shopping boom.
A subsequent private funding round of $800 million in 2022 saw Klarna’s valuation drop to $6.7 billion.
Coming into its IPO, Klarna had raised $4.19 billion over 20 rounds, according to data from Tracxn. Investors in the company included Sequoia Capital Operations, Silver Lake Management, Adit Ventures, WestCap Management, Founders Fund Management, SoftBank Vision Fund LP, Dragoneer Investing Group, Technology Crossover Ventures LP, Macy’s Inc., BlackRock Inc., Visa Inc. and Ant Group Co. Ltd.
Klarna’s successful IPO follows a recent run of strong tech-related IPOs, including Figma Inc. in July and Firefly Aerospace Inc. in August.
The positive results have also seen more companies line up to go public after a near drought in IPOs over the COVID period amid market uncertainty. Earlier this week, Netskope Inc. and StubHub Inc. disclosed that they had filed for IPOs, while Infleqtion Inc. and CoinShares International Ltd. are opting to go public via mergers with special purpose acquisition companies.
Photo: Klarna
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