Klarna sets the stage for IPO: Timing is key, says CEO Sebastian Siemiatkowski

Klarna, the Stockholm-based fintech giant, is making significant strides towards its long-anticipated public listing, with all necessary criteria now in place. According to co-founder and CEO Sebastian Siemiatkowski, the company is well-prepared for an initial public offering (IPO), with the decision largely hinging on finding the optimal timing.

"We have met the criteria for a stock market listing, and now it's mostly a question of timing. So, we are actively working on everything needed to become a public company," Siemiatkowski stated in a recent interview with TT.

Klarna, known for revolutionizing the buy-now-pay-later (BNPL) industry, is reportedly eyeing a valuation exceeding SEK 200 billion (approximately USD 18 billion) as it prepares for a potential listing on the New York Stock Exchange within the next six months. This follows reports from Bloomberg, indicating ongoing discussions with investors regarding the sale of existing Klarna shares ahead of the public offering.

Strategic shifts ahead of the IPO

As part of its strategic preparation for the IPO, Klarna has undergone a significant transformation. In June, the company announced the sale of its checkout solution, Klarna Checkout, which operates in a fiercely competitive market against global players like Stripe, Adyen, and Shopify. Despite this move, Klarna continues to collaborate with these companies to offer seamless payment solutions globally.

"Other players are better at the payment aspect that merchants need, so we decided to sell Klarna Checkout. We want to become more of a network and card issuer—a bank for consumers," explained Siemiatkowski.

Drawing inspiration from American Express, Klarna has been expanding its offerings, now issuing physical payment cards linked to Visa and providing savings accounts. Just this week, the company launched "Klarna Saldo," a transaction account with interest-bearing deposits, transfers, payments, and a new tool for managing cashback offers. Future offerings may include salary accounts, mortgages, and mutual fund savings, although Siemiatkowski emphasized that Klarna is not rushing into these areas.

Expanding global footprint

Klarna's growth trajectory is far from complete. The company has established a strong presence in key markets such as the United States, Germany, and the United Kingdom, with profitability in the U.S. for the past 18 months.

"We still have a lot of work to do. We have an incredible amount of potential to grow," noted Siemiatkowski, particularly highlighting the U.S. as a priority for increasing market share.

Expansion within the European Union also remains a key focus. Klarna aims to solidify its presence in the remaining smaller EU markets, including Estonia, Latvia, and Lithuania, to ensure comprehensive coverage across the bloc.

"We have a few smaller countries left in the EU—Estonia, Latvia, and Lithuania, among others—so that we cover the entire EU. Then, we will have the global reach we need to compete," Siemiatkowski added.

Investor takeaway

For potential investors, Klarna's strategic pivot towards becoming a more robust financial network and its commitment to global expansion underscore its readiness for the public markets. The company's focus on timing, coupled with its ongoing discussions with investors, suggests that Klarna is positioning itself to maximize value at its eventual IPO. With its long-term goals of customer volume, global presence, and profitability now achieved, Klarna is poised to enter the next phase of its growth journey on a global scale.

Source: Dagens Industri