Buy now, pay later firms like Klarna and Block’s Afterpay could be about to face tougher rules in the U.K.
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Klarna, which is known for its popular “buy now, pay later” business, announced Wednesday it has filed initial public offering documents with the U.S. Securities and Exchange Commission.
The Swedish payments company said in a statement that the number of shares to be offered and the price range for the proposed offering have not yet been determined. The timing of the listing is also subject to market conditions.
Analysts recently valued the company in the $15 billion range. At its peak during the pandemic-led surge in fintech stocks, the company had a valuation of $46 billion in a funding round led by SoftBank’s Vision Fund 2.
But Klarna took an 85% haircut in its most recent primary fundraising round, in 2022, when the firm raised money on a valuation of $6.7 billion.
Next to SoftBank, Klarna’s roster of shareholders also includes major names in venture capital, including Sequoia Capital and London-based firm Atomico.
Klarna’s CEO, Sebastian Siemiatkowski, previously told CNBC in an interview that unfavorable rules in Europe on employee stock options could risk the company losing talent to other U.S. tech giants such as Google, Apple and Meta.
“When we looked at the risks of the IPO, which is a number one risk in my opinion? Our compensation,” Siemiatkowski, who is approaching his 20th year as CEO of the financial technology firm, told CNBC. He was referring to company risk factors, which are a common element of IPO prospectus filings.
Plans for an IPO have been in the works for some time. In a February interview with CNBC’s “Closing Bell” in February, Siemiatkowski said an IPO in 2024 was “not impossible.”
In August, Klarna said it posted a profit in the first half of the year, swinging into the black from a loss last year as the firm edged closer toward its hotly anticipated stock market debut.
Klarna’s decision to go for a stock market listing in New York represents a major blow to European stock exchanges, which have been trying to encourage local tech giants to list at home.
The London Stock Exchange, for example, has made reforms to make the U.K. a more attractive market for tech companies to list, including the ability for founders to issue dual-class shares that enable entrepreneurs to maintain control over a company’s strategy and direction.
Siemiatkowski hadn’t previously committed to listing in one market over another, and London was among the markets he was considering for Klarna’s IPO.
However, in 2021 he said that the firm was more likely to list in the U.S. than the U.K., given America is a high-growth area for the firm where it is seeking to gain more brand visibility.
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