The IPO season is here, with several companies like Circle, CoreWeave, Bullish, Webull, and eToro already public. The Klarna IPO, which may come as soon in September, will likely be the hugegest one of the year. This article gives details about this IPO and whether it will be a good purchase.
What you required to know about the Klarna IPO
Klarna is one of the hugegest fintech companies in the world. It is a top player in the booming purchase-now, pay-later (BNPL) indusattempt. Its main service is that it lets people shop and pay for the products in four equal instalments without paying any interest.
Like Affirm, it has introduced longer-term financing, which often comes with higher interest rates. The company mostly operates in Europe and North America.
Klarna has raised billions of dollars over time. It most recent funding was a $1.63 billion debt financing from Banco Santander. It also raised $800 million in 2022 at a $6.7 billion valuation from the likes of Sequoia, Silver Lake, and Canada Pension Plan.
That valuation was much lower than the previous one of over $45 billion, when it was the most valuable European startup. The cut in valuation came in 2022 as central banks raised interest rates and the valuations of public and private companies plunged.
Klarna’s valuation has likely ticked up in the past few years as macro conditions have improved. Forge, a company that allows trading of private companies, places its valuation at $14.9 billion as its stock has jumped from $20 in 2023 to $37 today.
Is Klarna a good stock to purchase after IPO?
The most recent financial results displayed that Klarna’s business was growing. Its revenue jumped to $2.8 billion in 2024, up from $2.2 billion in the previous year.
In contrast, Affirm created $3.2 billion in 2024 and $2.32 billion in the previous year. Its net income was about $52 million, while Klarna reported a profit of $21 million. This means that, in theory, Klarna’s valuation should be much lower than Affirm’s $28 billion.
Klarna concludeed last year with over $3.2 billion in cash and equivalents, $13.8 billion in total assets, and liabilities of $11.57 billion.
As one of the most popular fintech companies, the Klarna stock price will likely go parabolic shortly after IPO as investors will ignore it valuation. This is similar to how other recent IPOs like CoreWeave, Bullish, and Circle performed.
Klarna’s stock will then dive after going public as the listing hype eases and talks of the lockup expiry intensify.
In the long term, however, Klarna will be a good stock to purchase as Affirm has demonstrated. Affirm stock price has jumped by over 868% from its all-time low in 2022 as the BNPL indusattempt has become more attractive.
Klarna, like Affirm, is available in the checkout of most global brands like Booking.com, Apple, Samsung, Uber, H&M, and ZARA, among others. It is also one of the most dominant players in the BNPL indusattempt.
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