Klarna is reportedly evaluating financial advisors for its initial public offering (IPO) in the United States.
Goldman Sachs, JP Morgan Chase And Morgan Stanley were top contenders to advise Swedish payments fintech, Financial Times (FT) reported Tuesday July 16, citing sources close to the matter.
The company, a pioneer in the buy now, pay later (BNPL) space, could list in the first half of next year, the sources said. A Klarna spokesperson declined to comment on the possible IPO when contacted by PYMNTS.
As the FT notes, Klarna was the last rated at $6.7 billion in 2022, part of a funding round that has been heavily discounted at a time of rising interest rates and falling tech stocks. This valuation represents a sharp drop from the $46 billion the company reached a year earlier, making it the most valuable startup in Europe.
Now, sources told the FT, Klarna and its advisers are confident the IPO market would see a comeback in 2025 after a turbulent few years.
Sébastien Siemiatkowskico-founder and CEO of Klarna, told the FT in 2023 the company was ready to go public, thanks to a sustainable business model and room for growth, but was waiting for stronger market conditions.
Company’s plans come as BNPL becomes even more popular, research from “Merchants’ Evolving Perspective on the Value of Card-Linked Pay Later Plans,” a collaboration between PYMNTS Intelligence and Splitit.
This report shows that 85% of merchants said the payment method had been used more often when paying online in the previous 12 months.
“Yet 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 that consumers use installment plans linked to existing general purpose credit cards issued by any bank when paying, and 34% said they would prefer that consumers use their own card and arrange the payment plan with their bank once the transaction is complete.
Consumers, however, want BNPL options. Another PYMNTS/Splitit collaboration “Divided, not conquered: The split payments landscape amid clouds of acquirer and merchant confusion,” found that about half of Gen Z and millennial shoppers had used BNPL at least once in the past year, and 23% of them had increased their use of BNPL during that time.
Additionally, 79% of BNPL users say they are very or extremely satisfied with the experience.
