Sweden's Klarna targets up to $14 billion valuation in long-awaited US IPO

By Manya Saini

(Reuters) -Sequoia Capital-backed Klarna said on Tuesday it was aiming for a U.S. listing valuing the fintech at up to $14 billion, moving it closer to its long-awaited market debut as investor appetite in high-growth tech stocks revives after a years-long dry spell.

Companies that postponed going public are returning to test investor interest, supported by steadier markets and improving confidence.

Several tech listings, including neo-bank Chime and stablecoin issuer Circle , have attracted solid demand, signaling a cautious revival in activity.

The buy now, pay later lender and some of its investors plan to sell 34.3 million shares in the IPO at prices expected to be between $35 and $37, aiming to raise up to $1.27 billion.

Fintechs such as Klarna are gaining market share from traditional banks by offering faster, more flexible payment options and digital-first services that appeal to younger consumers, with analysts expecting the growth of BNPL and similar products to accelerate as e-commerce expands worldwide.

BNPL services let shoppers split purchases into smaller, interest-free instalments over weeks or months, instead of paying upfront.

The payments sector has also so far largely escaped the impact of tariffs, with consumer spending showing resilience across major economies.

Still, the BNPL model faces risks in a high-inflation environment, with potential credit losses and limited tracking of users' credit profiles raising concerns about profitability and long-term consumer resilience.

Stockholm, Sweden-based Klarna, which transformed online shopping with its short-term financing model, was founded in 2005 - when e-commerce was in its nascence - and reached unicorn valuation in 2012.

The company, led by co-founder Sebastian Siemiatkowski, counts Silicon Valley venture capital giant Sequoia among its most prominent and longtime shareholders.

It caught investor attention after its valuation soared from $5.5 billion to $46.5 billion in just about two years after three rounds of funding between mid-2020 and 2021.

BELLWETHER EVENT

Analysts have said a successful Klarna IPO could indicate renewed investor confidence in high-growth fintech companies, while a tepid response may signal concerns over lofty valuations and sector regulation.

The company, which has been eyeing a New York listing for years, paused its plans in April due to choppy global markets after U.S. President Donald Trump announced sweeping tariffs on major trading partners.

In 2021, Klarna considered a direct listing - a route that avoids selling new shares and the costs of a traditional IPO - but later abandoned the plan and raised funds at a sharply reduced $6.7 billion valuation.

Besides Sequoia, one of the fintech's top shareholders is Danish billionaire Anders Holch Povlsen's Heartland A/S, the parent company of fashion brands Only and Vero Moda.

Klarna's push into the U.S. highlights the growing demand for these services, especially among younger shoppers seeking flexible payment options.

It has also launched banking products and partnered with leading global brands such as fast-fashion retailers Zara and H&M, luxury-bag maker Coach and cosmetics giant Sephora.

The company had about 111 million active consumers and roughly 790,000 merchants in 26 countries as of June 30.

Klarna has applied to trade on the New York Stock Exchange under the ticker symbol "KLAR".

Goldman Sachs, J.P.Morgan and Morgan Stanley are the lead underwriters.

(Reporting by Manya Saini in Bengaluru; Editing by Arun Koyyur and Pooja Desai)