Swedish firm Klarna targets $1.27 bn in New York listing; eyes $14 bn valuation, big investors line up to exit

Sweden’s “buy now, pay later” financial services firm Klarna said on Tuesday it aims to raise $1.27 billion through an initial public offering in New York, setting a price band of $35 to $37 a share, after an earlier plan was delayed due to market volatility.Klarna had first announced plans for an IPO in November last year, but the listing was pushed back earlier this year as equity markets turned choppy. In its latest statement, the company said the offering would give it a market capitalisation of about $14 billion at the top of the price range, AFP reported.Founded in 2004 by three students, Klarna allows shoppers to pay for purchases up to 30 days later or in four instalments without interest. The firm said it generated a net profit of $21 million in 2024 on revenues of $2.8 billion, with commissions from online retailers forming the bulk of its income, alongside interest earnings on longer-term consumer financing.The IPO will comprise 34.3 million shares, with existing investors accounting for the overwhelming majority of the sale. Around 28.7 million shares will come from early backers exiting part of their holdings, while Danish businessman Anders Holch Povlsen, who owns the Bestseller retail clothing chain, plans to offload about 6.3 million shares.Klarna entered the US market in 2019 and has since grown its presence, but the company’s valuation has seen sharp swings. In 2021, at the height of the pandemic spending boom, Klarna was valued at $45.6 billion. Just a year later, that figure slumped to $6.7 billion as inflation surged, interest rates climbed and investor sentiment towards tech firms soured.The company did not disclose the date of its planned US listing but confirmed that its fresh filing marks a renewed push to tap global capital markets.