Klarna, the Swedish fintech giant, is set to make a significant impact on Wall Street with its IPO priced at $40 per share, valuing the company at approximately 140 billion SEK. This makes it one of the largest IPOs on Wall Street this year. Despite a previous drop in valuation, Klarna's revenue surged in the second quarter, highlighting its global growth and competitive edge in the fintech industry.
Klarna's Valuation Hits 140 Billion SEK in Major Wall Street Debut
Klarna's Valuation Hits 140 Billion SEK in Major Wall Street Debut
Klarna's introductory price on the New York Stock Exchange is set at $40 per share, reports CNBC. This results in a total valuation of Klarna at around $15 billion, equivalent to approximately 140 billion SEK, as the payment company is set to be listed on Wednesday.
With this valuation, Klarna becomes one of the largest IPOs on Wall Street so far this year.
The benchmark in Klarna's prospectus, which was sent out last week, was an introductory price of $35–37 per share. Klarna thus aimed for a valuation—including all shares not traded on the stock exchange—of approximately $13–14 billion (123–131 billion SEK).
The publicly traded American competitors Affirm and Paypal are currently valued at about twice and five times as much, respectively.
Valuation Dropped in New Share Issue
Klarna's valuation can be compared to Volvo Cars' valuation of 163 billion SEK in its listing on the Stockholm Stock Exchange in 2021 and Spotify's valuation in its introduction on the New York Stock Exchange in 2018: 245 billion SEK.
One can also compare with the Swedish major banks—which in several business areas are challenged by Klarna and other so-called fintech companies—whose valuations currently range from approximately 240–360 billion each.
Historically, when the company has raised new capital in share issues, Klarna has been valued significantly higher. In the spring of 2021, the valuation was up to $45.6 billion, which according to the then exchange rate corresponded to 485 billion SEK. However, in a new share issue just over a year later, the valuation dropped to 71.5 billion SEK.
Revenue Boosted in Second Quarter
The buy-now-pay-later company was created in 2005 by a Swedish entrepreneurial trio—CEO Sebastian Siemiatkowski along with Victor Jacobsson and Niklas Adalberth—though initially under the name Kreditor Europe AB.
Klarna—which competes globally with payment services like Affirm, Afterpay/Clearpay, and Paypal—has grown significantly since the company launched in the US in 2015 and received a banking license from the Swedish Financial Supervisory Authority in 2017.
Revenue increased in the second quarter this year to 7.9 billion SEK, resulting in an adjusted operating profit of 278 million. However, the net result was a loss.
The number of active consumers using Klarna totaled 111 million in 26 countries during the quarter, and the number of merchants using Klarna worldwide reached 790,000.