Swedish Buy Now, Pay Later (BNPL) provider Klarna is preparing for its initial public offering (IPO) in the US by raising at least $1bn to increase its valuation.
According to Bloomberg, the payment technology firm is aiming for a valuation of more than $15bn for its US IPO on the New York Stock Exchange, with the report revealing that its filing could come as soon as next week.
Whilst details regarding the IPO, pertaining to dates and timings, are subject to change, Klarna is reportedly seeking to file the price of its listing in early April.
The Swedish company is working with 15 US banks to assist with its IPO, such as JP Morgan, Goldman Sachs and Morgan Stanley.
Having established itself as a leader in the BNPL sector, with the instalment-based payment method becoming one of the most popular within the field, Klarna has diversified its product stack with the introduction of AI-based tools for merchants and customers.
It has a long list of high-profile partners which it has lent its BNPL capabilities to, such as Lenovo, Adyen, Uber, and more. The company saw its valuation reach peak heights during 2021 when it stood at over $46bn.
However, various macroeconomic factors, such as the start of the Russia-Ukraine war in early 2022, followed by a scale back on fintech investment from the heights that occurred in 2021, saw Klarna’s valuation decline to as low as $6.5bn the year after.
Having recovered to raise its valuation to as high as $14.6bn in late 2024, the company has viewed an IPO for the past several years to maximise its valuation as a publicly-listed company.
In November 2024, it filed a confidential IPO with the US Securities and Exchange Commission (SEC), opting for the US market over the UK where it has a strong customer base.
Concerns for the LSE
Klarna opting to list its IPO in the US as opposed to the London Stock Exchange (LSE) in London deals another blow to the UK fintech market, and it could be set to miss out on more fintech companies listings.
Monzo CEO TS Anil stated last January that he prefers an IPO listing in the US over its UK homebase, whilst other board executives prefer to keep the listing within the UK.
This would be a huge blow for UK fintech if one of its biggest success stories in Monzo decided to list an IPO in the US. The digital bank is one of the fastest-growing fintechs across Europe, bringing in over 10 million customers over the past ten years.
However, not only could Monzo be opting for a US IPO, but its UK-based counterpart Revolut may also cross the Atlantic too.
Revolut have potentially been gearing up for an IPO listing after offloading more than $1bn in shares as part of a secondary share sale. Reports have suggested that the digital bank is preparing for listing in 2026, which could see its valuation soar further from the $45bn it raised from the secondary share sale last year.
The UK has struggled as of recent years when it comes to investment, particularly on IPOs on the LSE.
Statista research showed that LSE IPO valuations declined significantly from £8.12bn in 2021, to £1.56bn in 2022. This decline continued into 2023, where investment valuations dropped to under £1bn, the lowest since the financial crisis in 2008.
If Monzo and Revolut opt to follow Klarna to the US, it would be a damning indictment of how the UK is able to compete with the country when it comes to attracting investment for its world-renowned fintech sector.
