Swedish fintech Klarna confirmed that it was taking steps “toward a possible IPO.”
The company has initiated a process of restructuring a legal entity to create a holding company in the UK “as an important first step” in its IPO plans, a Klarna spokesperson told TechCrunch+. This decision follows a positive third quarter in which Klarna made a profit and reported 30% higher revenue of around $550 million.
The creation of the British holding company, according to the spokesperson, This is an administrative change that has been in the works for more than 12 months “and does not affect anyone’s roles or Klarna’s Swedish operations.” The creation of a new legal entity at the top of the company’s corporate structure would allow it to be more easily listed on the stock exchange.
“Klarna Holding will continue to be the regulated financial holding company under the direct supervision of the SFSA. [the Swedish Financial Supervisory Authority], and we will continue to hold a Swedish banking license. This entity would be registered in the United Kingdom,” the company added.
CEO and co-founder Sébastien Siemiatkowski wrote to some of Klarna’s 150 largest shareholders last weekwith the support of the company’s board of directors as well as venture capital firms Sequoia and Heartland, to seek their approval to create the new legal entity.
Klarna has not yet made a decision on when or where the IPO will take place, according to sources. It chose to establish the holding company in the United Kingdom because it considers the region “a highly respected global financial market with a legal, regulatory and capital markets framework familiar” to its global investor base, these sources said.
Last week, Klarna reached an agreement with the workers who were to strike this week in Sweden, the company’s home country.
Globally, Klarna has 150 million customers, 500,000 merchant partners and approximately 5,000 employees. Its most recent valuation was $6.7 billiondown 85% compared to Valuation of $45.6 billion he boasted about one year before.
Earlier this year, Siemiatkowski told TechCrunch that the The United States has become Klarna’s largest market in terms of revenuesurpassing Germany. Giving people the option to pay in installments (commonly known today as buy now, pay later) is only part of what Klarna does these days, Siemiatkowski pointed out at the time.
The app has evolved over time to become what Klarna describes as “an end-to-end shopping destination” for consumers, with features beyond payments, such as financial management tools, tracking deliveries, wish lists, digital receipts and price drop notifications.
“We have been labeled as a BNPL provider, but that is no longer true today, even though it was years ago. We have tons of other use cases that are growing at a much faster rate than the original BNPL product,” Siemiatkowski said. “But the cachet is there, so it takes a little time for people to recognize the change.”
This isn’t the only IPO on our long-term radar
Notable among the Klarna IPO talk is that it is far from the only private company worth billions we’re seeing approach the public markets. It’s not even the only fintech player on the list.