Fintech
Klarna reportedly preparing for a possible IPO in the US in 2025
Clarify is considering hiring financial advisers for its initial public offering (IPO) in the United States.
Goldman Sachs Consulting Firm, JPMorgan Chase AND Morgan Stanley were the main contenders to advise the Swedish FinTech on payments, according to the Financial Times (FT) reported Tuesday (July 16), citing sources familiar with the matter.
The company, a pioneer in the buy now, pay later (BNPL) space, could go public in the first half of next year, the sources said. A Klarna spokesperson declined to comment on the potential IPO when contacted by PYMNTS.
As the FT notes, Klarna was the last valued at $6.7 billion in 2022 in a deeply discounted funding round at a time of rising interest rates and plummeting tech stocks. That valuation was a sharp decline from the $46 billion the company had reached a year earlier, making it the Europe’s most valuable startup.
Now, sources told the FT, Klarna and its advisers are confident the IPO market will return to growth in 2025 after a turbulent few years.
Sebastian SiemiatkowskiKlarna co-founder and CEO, told the FT in 2023 that the company was ready to go public, thanks to a sustainable business model and room for growth, but that it would wait for stronger market conditions.
The company’s plans come as BNPL is becoming increasingly popular, according to research from “Merchants’ Evolving Perspective on the Value of Card-Linked Deferred Payment Plans,” a collaboration between PYMNTS Intelligence and Splitit.
The report found that 85% of merchants said they had used the payment method most often when making online payments in the previous 12 months.
“However, only one in four merchants surveyed said they would prefer their individual customers to use BNPL at checkout“, PYMNTS wrote earlier this month. “In contrast, 38% said they would prefer consumers to use installment plans linked to existing generic credit cards issued by any bank at the time of payment, and 34% said they would prefer consumers to use their own card and arrange the payment plan with their bank after the transaction is complete.”
Consumers, however, want BNPL options. Another PYMNTS/Splitit collaboration “Divided, Not Conquered: Buyer-Merchant Confusion Clouds Split Payments Landscape” found that nearly half of Gen Z and Millennial shoppers had used BNPL at least once in the previous year, while 23% of them increased their use of BNPL over the same period.
Additionally, 79% of BNPL users said they were very or extremely satisfied with the experience.