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After the chaos, Klarna’s IPO is taking shape

Klarna could IPO as soon as Q3 this year in a US float that could value the Swedish buy-now-pay-later giant at $20 billion.

Klarna could hold its IPO as soon as Q3 this year in a US float that could value the Swedish buy now, pay later giant at $20 billion, a new report reveals.

It was known that a Klarna IPO was forthcoming. But a Bloomberg report suggests a definitive roadmap is now taking shape—though the timing is awkward.

On paper, it might make sense to go public soon. The company’s annual results, released today, showed that in 2023 it cut its losses by 69% from the year before—from €1 billion to €290 million. Furthermore, in November the company was buoyed by the fact it reported its first quarterly operating profit in four years.

Yet it’s hard to ignore that last week the company was in the headlines for all the wrong reasons after a public boardroom spat involving its 22% shareholder Sequoia and ex-Sequoia chair and board member Michael Moritz. According to some reports, the conflict stemmed from discussions related to shareholder agreements ahead of an IPO. It’s not without irony that the debacle could end up denting the confidence of any investors worried about governance issues at the company.

Investor wrangling aside, the consensus seems to be that Klarna’s IPO feels overdue. The company, which will mark its 20th birthday next year, has been a poster child of Europe’s fintech boom.

At first, Klarna was at the vanguard of consumer finance innovation, reaching unicorn status in 2015. Then, in 2022, it weathered a major reset that saw it slash its workforce by 10% and take a significant valuation cut.

In a market such as this, it is almost impossible to pick the ‘right time’ to go public. Which is why for Klarna this might be as good a time as any.

Featured image by Astrid Stawiarz/Getty Images

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