Klarna Charts IPO Path Amid Worker Agreements and Valuation Speculations
Klarna, a prominent player in the Buy Now, Pay Later (BNPL) space, is making strategic moves by establishing a new holding company in the UK, a step that precedes its speculated initial public offering.
Simultaneously, the company has reached an agreement with Swedish workers to avert a potential strike.
The process to create a legal entity for the new UK-based holding company is considered a crucial step in Klarna’s long-term plan towards a potential IPO.
Reports from sources like Sky News suggest the IPO might happen in the first half of the upcoming year. However, Klarna might reconsider its listing location, potentially favoring New York over London.
The estimated valuation for the IPO ranges between $15 billion and $30 billion, a significant rise compared to its valuation during its last funding round in 2022. Nonetheless, this prospective valuation remains notably lower than the $46 billion valuation the company commanded in 2021.
Klarna faced a challenging period resulting in a significant revaluation within the BNPL market. The company downsized its workforce by ten percent, impacting its valuation amidst broader adjustments in the tech market.
However, recent developments indicate signs of recovery, with the company reporting a net profit in the third quarter. Notably, it experienced substantial growth in the United States, with a 46% year-on-year increase in gross merchandise value.
In parallel, Klarna managed to avert a potential strike by negotiating an agreement with unions at its Swedish headquarters. The agreement involves Klarna becoming a member of BAO, an employer organization for banking institutions, falling under the collective agreement between BAO and the unions.
Sebastian Siemiatkowski, CEO of Klarna, expressed optimism in the agreement, noting, “I am confident that this agreement will benefit Klarna and further strengthen the Swedish model from within.”