Klarna's upcoming U.S. IPO could pave the way for a series of British fintech listings, following a dry spell in new technology offerings, according to investors, legal experts, and company executives.
Headquartered in Stockholm, Klarna is recognized for its buy-now pay-later services and recently filed to go public on the New York Stock Exchange, marking its second attempt at a public listing in four years. The company initially sought to IPO in 2021 after achieving a soaring valuation across multiple funding rounds. However, as interest rates increased and economic conditions wavered, investor sentiment towards tech firms declined, forcing Klarna to adjust its valuation during a 2022 fundraising round.
Now, the company is making another attempt, with an estimated valuation of at least $15 billion for the upcoming IPO likely set for the first half of April. James Wootton, a partner at Linklaters, highlighted that a successful IPO for a prominent player in the sector could encourage others to view public listing as a viable growth or liquidity option.
In 2021, during a post-pandemic fundraising boom, 101 fintech companies raised $296.86 billion through IPOs on global markets. In stark contrast, only 86 firms secured $32.76 billion from IPOs between 2022 and 2024.
Klarna's plans have sparked optimism for a revival in the market. Tim Levene, CEO of the London-listed fintech investment fund Augmentum, noted that the market is looking to Klarna as a barometer for future fintech IPOs, many of which are in the pipeline. He expressed hope that Klarna would be the first of many companies to go public, positively influencing the broader market.
Other fintech companies, including challenger banks Monzo and Starling, as well as payments firms Zilch and Ebury, are also contemplating their future IPO plans. Zilch, which offers a competing buy-now pay-later product, is targeting a floatation in 2026, according to its chief executive, Philip Belamant. He stated that Klarna's IPO would be a critical moment for the sector, with potential to enhance investor confidence in European fintech listings.
Ebury, a payments company majority-owned by Banco Santander, is preparing for a London listing as early as June, aiming for a valuation of around £2 billion ($2.6 billion), pending favorable market conditions. Meanwhile, Britain's Revolut has expressed intentions to list publicly, though specific plans remain undisclosed.
Zopa, based in London, has not set a definitive IPO timeline but continues to prepare for the possibility, prioritizing favorable macroeconomic conditions. Many fintech companies have raised sufficient funds to take their time with potential listings. Patrick Evans, head of UK equity capital markets at Citi, commented that several of these firms can afford to choose their timing strategically.
Klarna's decision to pursue a U.S. listing will likely reignite discussions about the optimal locations for these fast-growing companies. Monzo is contemplating an IPO either in Britain or the U.S. but has yet to finalize its timeline or venue. The London Stock Exchange is actively courting fintechs, including Zilch, which has not made a venue decision.