Klarna Group Plc has publicly filed for a US IPO, which could become one of the largest financial company listings of the year. The Stockholm-based digital payments firm reported a 24% increase in revenue last year. For 2024, Klarna posted a net income of $21 million on revenue of $2.81 billion, compared to a net loss of $244 million on $2.28 billion in revenue the previous year, according to its filing with the US Securities and Exchange Commission on Friday. Klarna initially filed confidentially for the IPO in November.
Bloomberg News reported that the company aims to raise at least $1 billion through the IPO and targets a valuation of over $15 billion. The company and some of its shareholders are offering shares in the public sale.
This listing comes as Wall Street evaluates the potential effects of recent market volatility on a group of large companies looking to go public in the US, including AI cloud provider CoreWeave Inc. and medical supply company Medline Inc.
Klarna, led by Co-Founder and CEO Sebastian Siemiatkowski, provides “buy now, pay later” financing. This lending model gained popularity early in the decade and surged further during the pandemic, driven by the rise in online shopping.
In October, analysts valued Klarna at around $14.6 billion, a rise from $6.7 billion in 2022 but a significant drop from its $45.6 billion valuation in 2021. According to PitchBook data, the firm has raised $4.8 billion in capital.
Klarna serves 93 million active consumers and partners with over 675,000 merchants. In preparation for its IPO, the company refocused by forming a new British holding company, divesting certain businesses, and investing in AI. It sold its Checkout payments business for $520 million and acquired New Zealand’s Laybuy assets.
Klarna has strengthened partnerships with major tech firms, including Google Pay and Apple, and has collaborated with Adyen NV, Xero Ltd., and Worldpay Inc. The company also discusses new products and services with banks and payment networks. It has long worked with Visa Inc. and WebBank for credit card and lending offerings.
“We are currently in advanced stages of establishing business relationships with a second bank partner in the United States, through which we expect to offer our Fair Financing products in that market, and with a second payment network, on which we plan to issue the Klarna card in select markets,” Klarna said in the filing. “We expect that, as a result of these negotiations, we will enter into a binding agreement with the relevant partner in the first quarter and second half of 2025, respectively.”
In February, JPMorgan Chase & Co.’s payments processing unit partnered with Klarna to expand buy-now, pay-later options for about 900,000 businesses, allowing them to offer Klarna’s fast-credit solutions to customers.
Klarna also disclosed a partnership with Milkywire AB, an environmental platform founded by CEO Sebastian Siemiatkowski’s wife. Since 2022, the company has paid Milkywire $2.6 million for services. Major investors in Klarna include Sequoia Capital, which owns 78.8 million shares; Heartland A/S, with 37.1 million shares; and co-founder Victor Jacobsson, with 31.4 million shares.
The IPO filing follows a turbulent period for the company, including a boardroom dispute and the recent removal of board member Mikael Walther, who had clashed with Chairman Michael Moritz.
Klarna informed potential investors that the Swedish Consumer Agency is investigating its compliance with marketing laws in the country.
After the IPO, Klarna plans to implement a new policy requiring board approval for certain related party transactions. The offering is being led by Goldman Sachs, JPMorgan, and Morgan Stanley, with 11 other firms involved. Klarna aims to list on the New York Stock Exchange under the symbol KLAR.
