The Swedish fintech company, valued at €13.6b recently, expects to trade on the New York Stock Exchange under the symbol “KLAR.”
It has been rumored for some weeks. But now it’s official. Klarna Group plc (“Klarna”), the Swedish fintech and global payments network, has announced that it has publicly filed a registration statement on Form F-1 (the “Registration Statement”) with the U.S. Securities and Exchange Commission (the “SEC”) relating to a proposed initial public offering of its ordinary shares. The number of shares to be offered and the price range for the proposed offering have not yet been determined. Klarna has applied to list its ordinary shares on the New York Stock Exchange under the symbol “KLAR.”
However, the 400-page prospectus is preliminary, Klarna said. Information about the valuation and the number of shares that will be made available to the market will come later. Owners such as US-based Blackrock have previously valued Klarna at SEK 150 billion (€13.6b). However, this is far from Klarna’s highest valuation of SEK 390 billion (€35.3b) in 2021. Media reports suggest it could aim to raise more than $1 billion at a valuation exceeding €13.6b.
According to the filings with the SEC, Klarna had a total turnover of SEK 28.4 billion (€2.6b) in 2024, representing a growth of 24 percent compared to 2023. The operating profit amounted to €17.6 million.
Among the risks mentioned in the SEC document are that Klarna has a history of making losses and may continue to do so in the near future and that things may happen that make it impossible to achieve sustainable growth while making a profit. Another risk mentioned is that Klarna has discovered deficiencies in the IT system used to prepare financial reports, which are not expected to be fully resolved by the end of the year.
The biggest fintech event since the listing of crypto exchange Coinbase in 2021 is expected to be Klarna’s listing on the New York Stock Exchange. However, a tech freeze in the US after President Donald Trump’s policies has made the market more uncertain, with Klarna’s competitor Affirm falling 40 percent last month.
Of course, questions from the market are many. Why does Klarna want to do an IPO right now? In times of market chaos and general uncertainty, isn’t it better to wait? Meanwhile, Klarna’s larger competitors are doing really badly right now. So perhaps the Swedish fintech wonder is hoping to grab market share when its peers are struggling. If so, we’ll have to wait for the answers. For now, a quiet period begins on Klarna’s part, until the IPO is approved and completed. There is no end date for this.
However, in an open letter sent at the same time as the application to the SEC, Sebastian Siemiatkowski took the opportunity to criticize the banking sector.
“It’s no surprise that skeptics are attacking us. We are challenging one of the largest profit pools ever created by humanity – the profit pools of the world’s largest banks,” he wrote.
According to him, banks are fundamentally about trust, something Siemiatkowski says traditional banks have never given their customers. But Klarna does, he says.
“Somewhere along the way, traditional banks traded that principle for profits and lost sight of what really matters. Instead, it became financial engineering, raking in profits through late fees, penalties for overdrafts, debt traps and countless other tricks to exploit customers,” Siemiatkowski said.
SGI Europe has reached out to Klarna and Siemiatkowski, who refer to the press release and the quiet period. Hopefully, we can come back with an interview with Siemiatkowski once the IPO has gone through.
In the IPO of Klarna, Goldman Sachs & Co. LLC, J.P. Morgan and Morgan Stanley are acting as joint book-running managers; BofA Securities, Citigroup, Deutsche Bank Securities, SOCIETE GENERALE and UBS Investment Bank will act as bookrunners; and BNP Paribas, Keefe, Bruyette & Woods, A Stifel Company, Nordea Bank Abp, Rothschild & Co, Wedbush Securities and Wolfe | Nomura Alliance will act as co-managers for the proposed offering.
