Klarna has confirmed a long-expected initial public offering (IPO) in the US, setting the stage for it to enter the public market.
The Swedish buy now pay later (BNPL) giant confirmed in a short press release that it had submitted a draft registration statement with the US Securities and Exchange Commision (SEC), the regulator of the American stock market.
Klarna issued the press release as part of a requirement under the Securities Act 1933, and has provided little information about specific details of its listing. The number of shares to be offered and the price of said shares has ‘not yet been determined’ it said.
A timeframe for the listing is also unclear, depending on when the SEC completes its review process and other conditions are satisfied. Though the firm has not confirmed it, it will undoubtedly list on the New York Stock Exchange (NYSE).
A listing seems like a logical next step for Klarna following successive years of growth in various European markets, with it emerging as the preeminent provider of BNPL services on the continent. The company reported year-over-year revenue growth of 29% to SEK 6.4bn (€558m) in its last trading update.
The listing also comes as a blow to the London Stock Exchange (LSE), though at this point it should not come as a surprise as Klarna’s US listing ambitions have been the subject of speculation for some time.
Back in August, Bloomberg reported that the company was evaluating a secondary sale of shares to provide financial backing for a stateside listing, citing a ‘person close to the matter’.
For the City of London, though it may not have come as a shock, Klarna’s US listing still comes as gloomy news as another firm snubs the LSE for the NYSE – seen earlier this year when global gambling giant Flutter shifted its primary listing from London to New York.
More and more high-growth and high-value companies are looking to US listings, when available, instead of European counterparts – of which the LSE is the second largest by market cap after the combined cap of the Euronext bourse.
Another interesting factor to take into account is the nature of US BNPL regulations, though this will not have a bearing on Klarna’s US listing ambitions nor its future performance on the US market.
The Consumer Finance Protection Bureau (CFPB) introduced new rules around BNPL earlier this year effectively classifying the payment method as a form of credit. Klarna was critical of this, calling the two ‘oranges and apples’, but in contrast in the UK it has been vocal in calling for greater regulation of BNPL.
