Klarna Is Moving Toward a Big IPO. Here’s What You Need to Know | Global News Avenue

Klarna Group could pull off its biggest initial public offering in a year.

This payment processor is known for its “buy now, pay later” approach (French national oil company) service, recently started Initial Public Offering (IPO) The process is conducted with the SEC through confidential filings, which allow companies to withhold information from the public until they are close to joining an exchange.

Klarna’s Nov. 12 press release discussing the IPO didn’t provide many key details. The company declined to comment investment encyclopedia Here’s what we know about Klarna about its valuation, how many shares it plans to sell, the timetable for its IPO and whether it will seek a public listing outside the United States.

Its IPO could be one of the largest in some time.

Analysts recently valued Klarna at about $14.6 billion after one of its backers, Chrysalis Investments, increased its stake in Klarna in the second quarter, according to Bloomberg. Chrysalis declined to comment on its valuation of Klarna.

That would make Klarna the second-highest valued IPO of 2024, trailing only Lineage by billions of dollars (Wire), cold storage operator Available this summer.

Klarna’s value has fluctuated in recent years. Klarna Announce In July 2022, the company was valued at $6.7 billion, a fraction of its $45 billion valuation a year ago. Inflation, recession fears and other economic challenges have led to downgrades for many fintech companies, Klarna said.

Its co-founders met while working at Burger King. Revenue in the first half exceeded $1 billion.

According to Forbes, CEO Sebastian Siemiatkowski met Victor Jacobsson and Niklas Adalbers in 2005 (Niklas Adalberth), whom Simiatkoski met while working at Burger King. The company was originally called Kreditor and was later renamed “clear” after the Swedish word “clear”.

Klarna expanded into the Nordic region, then wider Europe, and eventually into the United States and Australia. Klarna currently works with 575,000 merchants, processes approximately 2.5 million transactions per day, and operates in 26 countries, according to its website.

In the first half of 2024, the company’s revenue was approximately $1.2 billion, based on the latest exchange rates. This includes interest and transaction fees on more than $47 billion worth of merchandise circulating through its platform.

Klarna has been in the United States for five years.

The company was founded in Stockholm and launched in the United States in 2019, according to its website, with its U.S. headquarters in Columbus, Ohio.

Klarna recouped its investment in U.S. expansion within five years, the company said earlier this year. The United States is now its fastest-growing market, and achieving profitability in the United States is a milestone Klarna seeks to achieve before going public. Simyatkovsky told CNBC.

BNPL has become a competitive space; such payment plans have grown in popularity rapidly, with about 9% of Americans now using them, according to the Federal Reserve Bank of Boston. Klarna’s main BNPL competitors include Affirm (AFRM), blocked (square number) and PayPal (PYPL.)

The company may seek to list elsewhere outside the U.S.

Klarna is likely to sell shares first in the United States, but it has considered a public listing elsewhere.

Siemiatkowski told CNBC last year that Klarna set up a holding company in the UK to pave the way for a potential London IPO. He said that at the time, Klarna was also seriously considering listing in the United States and did not rule out the possibility of listing in Stockholm or Germany.

“In the U.S., there are a lot of investors who are very savvy about fintech,” Siemiatkwoksi said. “The U.S. is our largest market by revenue and is growing rapidly.”

Most of Klarna’s income comes from businessmen.

The company said that more than 85% of its revenue in the first half of 2024 will come from transaction and service fees charged to merchants.

The fintech also charges interest, although its interest-free products remain more popular, Klarna said in its mid-year report. The company said about 90% of U.S. purchases made through Klarna are “Pay in 4” arrangements. Shoppers take advantage of this by splitting their purchases into four interest-free payments, paid every two weeks.

The company also provides More traditional financingmay last about two years, with interest rates as high as 34%. It recently began marketing the product as an alternative to bank accounts and credit cards.