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Klarna IPO
Everything you need to know
Swedish fintech company Klarna is rumoured to be considering an initial public offering (IPO) that could take place within the next year. Discover some essential points about Klarna’s upcoming IPO, including the company’s history, valuation, and recent financial reports.
Sometime in 2022
Going public
$45.6bn+
Valuation
40% YoY
Revenue increase
What does the company do and how does it make money?
Klarna was founded in 2005 in Stockholm, Sweden, where it still has headquarters. It belongs to the buy now, pay later (BNPL) industry that is taking the financial world by storm, with services allowing users to spread the cost of purchases over multiple transactions, such as three consecutive monthly payments.
The company has over 90 million active consumers across 250,000 merchants in 19 countries worldwide. Popular online retailers that offer Klarna as a payment method include H&M, Adidas, Sephora, IKEA, and ASOS, and the company has expanded its product offering to include physical stores.
According to Bloomberg, the company makes most of its money by charging its partnering retailer, where some companies pay up to 3.4% of each transaction plus 28 cents for the “pay in 30 days” option. It has estimated that retailers offering a BNPL payment method see an increase of approximately 45% in average order value.
When is Klarna’s IPO date?
Klarna hasn’t yet revealed an official IPO date as the company is still in early stages. It’s expected to follow the traditional IPO route, or a direct listing, ruling out the possibility of a SPAC merger, according to Reuters. CEO Sebastian Siemiatkowski previously stated in February 2021 that the company is waiting for its new CFO, Niclas Neglen, to settle into the role before confirming any IPO plans.
The company also hasn’t chosen a definite stock exchange to list on. It has expressed interest for both London and New York, with the former being most favourable due to Brexit’s impact on improved regulations for the financial sector. Klarna could follow in the footsteps of other recent IPOs on the LSE, including Wise, Deliveroo, and Darktrace.
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What will Klarna’s share price be?
Its share price will also be revealed closer to its IPO date when the company officially files to go public.
What is Klarna’s valuation?
The company was last valued at $45.6bn in a fundraising round in June 2021 that was led by Japanese conglomerate SoftBank, raising over $639m. This makes it one of the most valuable fintech firms in the world, if not the most valuable, according to TechCrunch.
In 2013, Klarna became a unicorn company after reaching a market cap of over $1bn, also reaching 10 million users (which was more than the population of Sweden at the time).
How to trade on Klarna’s IPO
1. Register your interest
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2. Open an account
Choose whether you want to spread bet or trade CFDs when the derivative is available on our platform. You can practise trading on Klarna’s competitors in the meantime with virtual funds on a CMC Markets demo account.
3. Pick a strategy
Choose whether you want to go long (buy) or go short (sell). Please note that some trading restrictions may apply on initial trading.
4. Manage your risk
Learn how to apply stop-loss and take-profit orders to reduce the risks that come with trading in the IPO market.
How are Klarna’s financials?
Klarna has a wealth of financial information available, despite being a private company. In 2020, the company reported revenues of $1.09bn, a 40% increase from the previous year’s figures. It was the first time that revenues crossed the billion-dollar mark. Losses also decreased across all major markets, which could be attributed to Covid-19’s positive effect on the ecommerce sector.
However, 2021 saw larger losses. In the first nine months of 2021, the company made pre-tax losses of $344m, a fourfold increase from how much it lost in the same period in 2020, according to CNBC. The majority of the losses came from general administrative expenses and credit losses. As more and more competitors enter the BNPL space, Klarna may expect to see its market share drop and new companies could see a wave of customer and investor interest.
Please note that past performance is not a reliable indicator of future results.
Why may investors be interested in Klarna’s IPO?
Are there any risks for the company?
Discover some of Klarna’s competitors
Affirm
- All clients
89% of CMC client accounts with open positions on Affirm expect the price to rise.
Sezzle
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100% of CMC client accounts with open positions on Sezzle expect the price to rise.
Zip
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95% of CMC client accounts with open positions on Zip expect the price to rise.
PayPal
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97% of CMC client accounts with open positions on PayPal expect the price to rise.
Client sentiment is provided by CMC Markets for general information only, is historical in nature and is not intended to provide any form of trading or investment advice – it must not form the basis of your trading or investment decisions.
FAQS
Is Klarna profitable?
Although it was one of the first fintech companies to reach profitability, Klarna has been unprofitable since 2019, making large losses each year. However, the company has made major investments in new technology and plans to expand to more international markets this year, signalling that the company’s financials may be moving towards a healthier state.
Are there other fintech companies having an IPO?
Other leaders within the fintech industry that are speculated to be planning a potential IPO include Monzo, Stripe, Revolut and Starling Bank. See a list of upcoming IPOs for 2022.
