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Swedish payments fintech Klarna is lining up financial advisers for a long-awaited initial public offering in the US that will be among the most anticipated listings in recent years, according to people familiar with the matter.
Morgan Stanley, JPMorgan and Goldman Sachs were in lead positions to secure top roles working on the potential listing of the ‘buy now, pay later’ pioneer, the people said.
An IPO could come as soon as the first half of next year, the people said, cautioning that no final decisions had been made. Other banks could yet join the underwriting group, they added.
Klarna was last valued at $6.7bn in 2022 in a fundraising round that was deeply discounted amid rising interest rates and falling tech stock prices. It had previously been priced at $46bn in a 2021 deal that made it Europe’s most valuable start-up group.
The dramatic valuation reduction made Klarna the poster child of the downturn for the once high-flying fintech sector and investors’ increased focus on profitability over growth. The company, which has embarked on a costly expansion plan, posted its fifth straight annual loss last year.
The company’s decision to seek a listing comes as executives at Klarna and its advisers were confident the IPO market would bounce back in 2025 after years of turbulence, said two people briefed about the matter. A company representative declined to comment.
Sebastian Siemiatkowski, Klarna’s co-founder and chief executive, told the Financial Times last year that the fintech company had all the requirements to go public, including having a sustainable business model and room to grow, but was waiting for better market conditions.
“From an IPO perspective, the requirements have been met,” he said. “So now, it’s more market conditions. It’s more a question of us getting ready and prepar[ing] the organisation. We don’t have any official date; we haven’t announced anything.”
It remains unclear what valuation the company could seek in an IPO.
Klarna’s backers include its largest investor Sequoia Capital, alongside others such as Japan’s SoftBank, Bestseller Group and Abu Dhabi’s sovereign wealth fund Mubadala.
Founded in 2005, Klarna allows customers to delay payments or divide them into instalments via short-term, interest-free loans.
Credit losses rose in the first quarter of this year as it pursues aggressive US expansion plans and consumers continue to struggle with inflation.
Klarna was regularly profitable until 2019, when it decided it would accept some credit losses in order to pursue its US growth plans.
Earlier this year Klarna was at the centre of a boardroom conflict involving top investor Sequoia Capital. At the heart of the dispute was tension about the influence of certain shareholders over Klarna’s corporate governance.
Representatives for Morgan Stanley, Goldman Sachs and JPMorgan declined to comment.