On March 14, Swedish fintech company Klarna announced a 24% increase in revenue for 2024, as it revealed its documentation for an anticipated initial public offering on the U.S. stock market. The booming fintech listings in 2021 slowed due to higher interest rates and lofty valuations. Nonetheless, with growing risk appetite in equity markets, numerous companies that had postponed their IPO plans are now considering a comeback.
Klarna, known for revolutionizing online shopping with the buy now, pay later concept, did not disclose details of its planned offering. Reports suggest it may aim to raise over $1 billion, with a valuation surpassing $15 billion.
The buy now, pay later market is projected to exceed $160 billion by 2032, attracting major retailers like Walmart, Target, and Amazon, alongside fintech firms including Klarna, Affirm, and Block, in catering to younger, credit-conscious consumers.
Klarna's revenues surged to $2.81 billion in the year ending December 31, compared to $2.28 billion the previous year, with profits of $21 million, a significant turnaround from a $244 million loss a year earlier.
Despite recent stock market volatility due to economic uncertainties, Klarna's decision to go public is seen as a litmus test for investors' appetite for high-growth fintech companies, following a period of subdued listings and constrained funding for private enterprises.
Klarna currently boasts 93 million active users across 26 countries, with its rival Affirm holding a comparable valuation of approximately $15 billion. Its IPO filing acknowledges efforts to rectify system weaknesses for financial statement preparation, as well as ongoing scrutiny by the Swedish Consumer Agency regarding marketing law compliance.
Having attracted substantial investor interest and rapid valuation growth, Klarna aims to list on the New York Stock Exchange under the symbol "KLAR," with support from lead underwriters Goldman Sachs, J.P. Morgan, and Morgan Stanley.