The leading buy now, pay later firm made a solid debut on the New York Stock Exchange, opening above its expected range at $52.
Klarna (KLAR) shares jumped 15% on Wednesday following its highly-anticipated debut on the New York Stock Exchange (NYSE). The Swedish lending firm’s initial public offering (IPO) sent its stock price soaring, with its market value surging past $19 billion.
Company shares were priced at $40 each, raising $1.37 billion for itself and selling investors. Shares opened at $52, climbing briefly to $57.20 before closing at $45.82, representing a 15% daily gain.
The amount of money raised in Klarna’s NYSE listing is believed to be the largest IPO so far this year. It marks the latest in a growing list of high-profile tech listings this year, suggesting increased demand from Wall Street for new offerings.
Recently, the likes of stablecoin issuer Circle and design software platform Figma have succeeded on their respective debuts. Later this week, leading crypto exchange Gemini is due to go public, while StubHub is also preparing to float soon.
What is Klarna?
Founded in 2005, the Stockholm-based company is a buy-now, pay-later (BNPL) lender with 111 million active users across 26 countries. Its BNPL model has proven a big hit, allowing shoppers to pay for purchases in smaller, interest-free instalments.
Last year, Klarna handled transactions totalling more than $105 billion. It is a major global player in the shopping space, having entered both the UK in 2014 and the US in 2015. According to the company, more than 80% of adults in its home country of Sweden used the service in 2024.
It competes directly with Affirm and Afterpay, the latter of which was bought by Block for $29 billion in 2021. Industry analysts are predicting that BNPL providers will continue taking the market share away from traditional banks and credit cards.
Klarna’s card already has 700,000 US users with five million currently sat on its waiting list. Its appeal differs slightly from Affirm’s rival product, which targets larger purchases and often includes interest.
Early Klarna investors gain big
Long-term investors of Klarna stand to benefit greatly from the company’s landmark NYSE listing. Selling shareholders, including Silicon Valley venture capital giant Sequoia Capital and Danish billionaire Anders Holch Povlsen’s Heartland A/S, raised $1.17 billion in the IPO.
Sequoia invested in Klarna 15 years ago and gained billions from the successful flotation. Other longstanding investors also cashed in, with more than 34 million Klarna shares sold during the offering. CEO Sebastian Siemiatkowski, who owns about 7% of Klarna, did not personally sell any shares in the IPO.
Andrew Reed, a partner at Sequoia, told CNBC that he was still in college when the firm made its first investment in an “alternative payments company in Stockholm.” The early work, he said, was around expanding in Europe.
“Being here in New York 15 years later with over 100 million consumers and over $100 billion of GMV [gross merchandise value] and close to a million merchants, it is staggering what one year after another of execution and growth and Sebastian’s long-term vision can do,” he said.
Klarna’s valuation remains below its $45 billion peak in 2021, when SoftBank invested at the height of market optimism. Rising inflation and higher interest rates reduced that figure, making today’s $19 billion value appear more realistic.
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