Klarna IPO: Swedish Fintech Giant Raises $1.37 Billion, Makes 40 Employees Millionaires
Swedish fintech giant Klarna has successfully completed its highly anticipated IPO on the New York Stock Exchange, raising significantly more than originally planned. The company positions itself as a direct competitor to traditional banks and aims to radically reshape the financial sector. Having started as a BNPL specialist, Klarna has since shifted its business model strongly toward becoming a neobank.
Klarna priced its shares on Tuesday evening at $40, well above the initially targeted range of $35 to $37. By selling around 34.3 million shares, the company raised approximately $1.37 billion. Investor demand was overwhelming: the IPO was more than 20 times oversubscribed, underscoring the strong interest in the Buy-Now-Pay-Later pioneer.
Based on 378 million outstanding shares, Klarna now achieves a total valuation of around $15.1 billion. The stock will begin trading on Wednesday under the ticker symbol “KLAR” on the NYSE.
Sequoia Capital as big winner
The main beneficiary of the successful IPO is venture capital giant Sequoia Capital, Klarna’s lead investor. According to sources, Sequoia stands to gain about $2.65 billion—a sixfold return on its total investment of roughly $500 million over the years. Remarkably, Sequoia is selling only about 2% of its stake in the IPO, signaling long-term confidence in Klarna’s business model.
Klarna’s IPO also includes participation from many major names in finance: Goldman Sachs, J.P. Morgan, and Morgan Stanley acted as joint lead underwriters. BofA Securities, Citigroup, Deutsche Bank Securities, Société Générale, and UBS Investment Bank served as bookrunners, while BNP Paribas, Keefe, Bruyette & Woods (A Stifel Company), Nordea, Rothschild & Co, Wedbush Securities, and Wolfe | Nomura Alliance acted as co-managers.
Over 40 new employee millionaires
A notable aspect of the IPO is employee participation: more than 40 Klarna staff members became millionaires from the listing. This generous sharing of success reflects Klarna’s corporate culture and is seen as an important element in retaining talent in the highly competitive fintech industry.
CEO Sebastian Siemiatkowski also plans to celebrate the IPO in a big way. “For the first time ever, the ringing of the bell will be broadcast live from a first-person perspective. Klarna will share this on Instagram (@Klarna) and on CEO Sebastian Siemiatkowski’s X account (@klarnaseb), bringing employees, partners, merchants, customers, and investors—who have all been crucial to our success—directly into the moment that opens the door for everyone to own a piece of the future of personal finance,” a press release stated.
Profitability as a challenge
Despite the successful IPO, Klarna still faces challenges in achieving profitability. In the twelve months leading up to June, the company generated $3.1 billion in revenue but also posted a net loss of $100 million. CEO Sebastian Siemiatkowski, however, stresses the importance of a “deliberate balance between growth and profitability,” especially with Klarna’s expansion into the U.S. market.
The company points out that it was profitable for 14 consecutive years from 2005 to 2018, before investments in new markets led to temporary losses. Klarna claims that despite IFRS-reported losses, it still generates a positive transaction margin.
With its successful IPO, Klarna positions itself as a serious contender in the fintech sector, aiming to challenge traditional banks with more customer-friendly financial products. Whether it can meet investors’ high expectations will become clear in the coming quarters.
