The initial public offering (IPO) of fintech company Klarna is one of the most anticipated technology IPOs ever. Over the past 5 years, the company has managed to increase its value by almost 50 times and it is no wonder that many investors would like to participate in its growth.
Klarna has kept information about the upcoming offering under the hood for a long time, but it seems that things have finally started to take off. Bloomberg reported today, August 15, 2024, that Klarna has chosen Goldman Sachs to begin preparing official documents for the company’s listing next month.
About Klarna
In times of economic instability, the question of money and its shortage is very relevant for ordinary people. They try to spend as little as possible at once, which is why “buy now, pay later” (BNPL) payment methods have become a very popular alternative, especially among the younger generation. They allow us to either pay for the goods we have purchased after a certain period of time, or to spread the payment over instalments instead of having to pay the whole amount at once. This model allows consumers to try out products before making a financial commitment, making it an attractive option for those who do not want to pay the full amount upfront.
One of the main pioneers of this concept was Klarna, who adopted the idea and pushed it globally.
From a small Swedish startup founded by three students in 2005, it has become one of the most recognizable fintech companies ever. Klarna’s growth is truly admirable. In 2017, it received a banking license from the Swedish regulatory authority, which allowed it to start providing services such as savings accounts, credit cards and so forth. This moment was pivotal for the company and profits shot up. As early as 2019, Klarne was granted the so-called “unicorn” status, which means that as a startup it has reached a value of USD 1 billion.
This of course hasn’t stopped the growth, and over the last 5 years, its value has often climbed to nearly $50 billion. In the first quarter of 2024 alone, its profits grew by approximately 38%.
Currently, Klarna operates in more than 20 countries and has approximately 150 million active customers who make approximately 2 million transactions per day. It works with more than 500,000 brands and merchants on BNPL, including major brands such as H&M, IKEA and Nike.
What we know about the Klarna IPO
There was talk of a potential IPO for Klarna as early as 2021, but the official date has been pushed back to present day. According to the company’s CEO Sebastian Siemiatkowski, Klarna is “pretty much ready” for the IPO. Earlier this year, he commented on the fact that the company had a profitable quarter, adding that Klarna is now just waiting for “the right moment”.
And we may now finally be getting that right moment! That’s because, according to Bloomberg, Klarna has decided to use Goldman Sachs Group Inc. to lead its initial public offering, which means that the first IPO documents could be released as early as September. Further details are not yet known, but it is believed that the IPO could be valued at around USD 20 billion.
