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The
valuation easily makes Klarna one of the biggest IPOs so far in
2025, which has been one of the busier years for companies going
public. The $40 share price came in above market expectations,
which called for Klarna to price its shares between $35 and $37
each.
Founded in 2005 as a payments company, Klarna entered the U.S.
buy now, pay market in 2015 in partnership with department store
operator Macy’s. Since then, Klarna has expanded to hundreds of
thousands of merchants and has embedded itself in internet
browsers and digital wallets as an alternative to credit cards.
The company recently announced a partnership with Walmart.
Klarna's most popular product is what’s known as a “pay-in-4”
plan, where a customer can split a purchase into four payments
spread over six weeks. The company also offers a longer-term
payment plan where it charges interest.
The business model has caught on globally. The company said 111
million consumers worldwide have used Klarna for a purchase.
Ahead of going public, Klarna reported in August that it had
second-quarter revenues of $823 million and had an adjusted
profit of $29 million.
The company will start trading Wednesday under the symbol “KLAR”
on the New York Stock Exchange. While based in Sweden and a
popular payment service in Europe, its decision to go public on
U.S. markets is a sign that the company executives see American
shoppers as its future growth market.
Klarna will now be the second-largest buy now, pay later company
on U.S. public markets, behind Affirm. Shares of Affirm have
surged more than 40% so far this year, valuing the company at
around $28 billion, helped by a belief among investors that buy
now, pay later companies may take away market share from
traditional banks and credit cards.
Klarna was backed by JPMorgan Chase and Goldman Sachs as their
investment banks.
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