Buy now, pay later companies like Klarna and Block’s Afterpay may face tougher rules in the UK.
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Klarna, known for its “buy now, pay later” business, announced on Wednesday that it has filed initial public offering documents with the US Securities and Exchange Commission.
The Swedish payments company said in a statement that the number of shares to be offered and the price range for the proposed offering have not been determined. The timing of listing is also subject to market conditions.
Analysts recently valued the company in the $15 billion range. At its peak during the pandemic-led surge in fintech stocks, the company was valued at $46 billion in a funding round led by SoftBank’s Vision Fund 2.
But Klarna took an 85% haircut in its latest major fundraising round, in 2022, when the company raised $6.7 billion in cash.
Alongside SoftBank, Klarna’s shareholder list also includes major names in venture capital, including Sequoia Capital and London-based company Atomico.
Klarna’s CEO, Sebastian Siemiatkowski, previously told CNBC in an interview that unfavorable rules in Europe on employee stock options could risk the company losing talent to other US technology giants such as Google, Apple and Meta.
“When we look at IPO risk, which is the number one risk in my opinion? Our compensation,” Siemiatkowski, who is approaching his 20th year as CEO of the financial technology company, told CNBC. They refer to the company’s risk factors, which are a common element of IPO prospectus filings.
Plans for an IPO have been in the works for some time. In a February interview with CNBC’s “Closing Bell” in February, Siemiatkowski said an IPO in 2024 is “not impossible.”
In August, Klarna said it posted a profit in the first half of the year, swinging into the black from last year’s loss as the firm edged closer to its hotly anticipated stock market debut.
Klarna’s decision to list on the stock market in New York represents a big blow to the European stock exchange, which has tried to encourage the local technology giant to list in front.
The London Stock Exchange, for example, has made reforms to make the UK a more attractive market for tech companies to list, including the ability for founders to issue dual-class shares that allow entrepreneurs to maintain control over the company’s strategy and direction.
Siemiatkowski has not previously committed to listing in one market over another, and London is among the markets he is considering for the Klarna IPO.
However, in 2021 he said the company would prefer to list in the US rather than in the UK, as America is a high-growth region for the company where it seeks to gain more brand visibility.
