Klarna Moves Closer to U.S. IPO as It Files Prospectus, Signalling a Long-Awaited Market Debut
Swedish fintech giant Klarna has taken a pivotal step toward its long-anticipated U.S. initial public offering, publicly filing its F-1 prospectus on Friday. The move brings the buy now, pay later (BNPL) firm closer to a listing that has been years in the making.
The company, which Bloomberg reported last week is seeking to raise at least $1 billion at a $15 billion valuation, has yet to disclose key details such as the number of shares it plans to sell or the anticipated price range. Those specifics typically emerge in the weeks following the prospectus filing, leaving investors to scrutinize the company’s financials while awaiting further clarity.
A Rebounding Valuation and a Profitable Turn
Investor appetite for Klarna’s public debut remains an open question, but there are signs that market sentiment may be shifting in the company’s favor. Klarna’s private valuation has recently climbed back to $14.6 billion, following an increased stake from one investor—a notable recovery from its 2022 low of $6.5 billion, when post-pandemic corrections sent venture-backed tech valuations tumbling.
Crucially, Klarna is entering the public markets on a profitable footing. The company reported $2.8 billion in revenue for 2024, a notable increase from $2.3 billion in 2023. Even more striking is Klarna’s return to profitability, posting a net profit of $21 million last year—a stark reversal from its $244 million loss in 2023.
From $45 Billion to $6.5 Billion: A Story of Boom and Bust
Founded in 2005 by CEO Sebastian Siemiatkowski, Klarna has grown into a dominant force in BNPL financing, a sector that surged in popularity during the e-commerce boom of the pandemic era. Klarna’s U.S. expansion, which began in 2015, helped fuel its meteoric rise, with its valuation peaking at $45.6 billion in 2021—one of the highest among European fintech firms.
However, as the venture capital bubble burst in 2022, Klarna’s valuation cratered by 85%. The company was forced to reassess its spending, cut costs, and chart a path toward profitability—a pivot that appears to be paying off as it prepares to enter the public markets.
AI-Driven Efficiencies and Strategic Shifts
Beyond financial performance, Klarna has recently made headlines for its aggressive embrace of artificial intelligence. The company has developed its own proprietary AI system, built on OpenAI’s ChatGPT, which has allowed it to cut costs and reduce its reliance on third-party software. In a bold move, Klarna scrapped its contract with Salesforce’s CRM platform in favor of its internal systems.
Siemiatkowski has credited the company’s AI-driven customer service chatbot with replacing 700 full-time contract employees, generating estimated annual savings of $40 million. Klarna has also scaled back hiring efforts, allowing its workforce to shrink from 5,000 employees in early 2023 to approximately 3,500 by the end of 2024—an efficiency push that underscores the company’s shift toward a leaner, more sustainable business model.
What Comes Next?
With its prospectus now public, Klarna’s next challenge will be convincing investors that its resurgence is more than a fleeting upswing. While the company’s return to profitability and AI-driven efficiencies are encouraging, the BNPL sector remains fiercely competitive, with regulatory scrutiny increasing in both the U.S. and Europe.
Whether Klarna achieves its $15 billion target valuation—or surpasses it—will depend on market conditions and investor sentiment in the coming weeks. For now, all eyes are on Klarna’s IPO pricing, which will provide the first real test of how public markets view the once high-flying fintech.