Klarna eyes Wall Street: Drafts IPO filing with the SEC

By Gloria Methri

Klarna Group, the global leader in buy-now-pay-later (BNPL) services, has taken a major step towards going public. The company announced that it has confidentially filed paperwork to the U.S. Securities and Exchange Commission (SEC) for an initial public offering (IPO).

While the exact details surrounding the number of shares and the price range for the offering remain under wraps, Klarna’s move comes as no surprise, given its meteoric rise in the industry. The IPO, which could value Klarna between $15bn and $20bn, will proceed following the SEC’s review, subject to market conditions and regulatory approval.

The company said, “Today’s announcement is in accordance with Rule 135 under the Securities Act of 1933 and does not constitute a direct offer to buy or sell securities. All activities related to the offering will comply with the registration requirements of the Securities Act.”

Klarna’s public debut is expected to draw significant attention, rivalled only by Revolut, which is valued at $45 billion and also anticipated to go public next year. The Swedish FinTech came into the investor spotlight after its valuation jumped from $5.5 billion to $46.5 billion in just two years, driven by three funding rounds between mid-2020 and 2021.

Recent financial results have further strengthened Klarna’s position. The company’s half-year earnings report in August highlighted a 27% increase in revenue, with adjusted profits reaching $66 million—an impressive recovery from the $45 million adjusted loss in the same period last year.

Shifting focus to the US

Klarna’s decision to pursue its IPO in the United States, though expected, represents another setback for Europe’s capital markets. This move mirrors that taken by Swedish peer Spotify, which opted for a New York listing in 2018.

The FinTech giant has prioritised expanding its presence in the U.S. in recent years, a strategy that has placed pressure on its profitability. Klarna has ramped up partnerships with American merchants in a bid to compete with BNPL rival Affirm.

Additionally, the company recently finalised a deal to transfer £30 billion worth of its UK loans to hedge fund Elliott, a move aimed at strengthening its capital position.