Klarna has confidentially submitted a draft Registration Statement to the Securities and Exchange Commission relating to the proposed initial public offering of its ordinary shares. The number of shares to be offered and the price range for the proposed offering have not yet been determined, but traders will be expecting a blockbuster debut with market whispers suggesting a $20 billion valuation range. Chrysalis Investments, an early investor in the firm, recently increased the value of its stake from £100.3 million to £120.6 million. The implied valuation of $14.6 billion is more than double the $6.7 billion price tag Klarna secured in a 2022 funding round amid a wider tech rout. However, it is still way down on the peak 2021 value of $46 billion. Klarna saw revenue rise 27% in the first half of 2024, buoyed by its aggressive use of AI, which CEO Sebastian Siemiatkowski says could help the BNPL giant halve its workforce. First half adjusted profits hit $66 million, compared to an adjusted loss of $45 million in the same period in 2023. Klarna is reaping the benefits of its push into the US, where it now works with a quarter of the top 100 merchants, driving a 93% year-on-year rise in gross profit in the country, which now represents its largest market worldwide. The filing in the US represents a blow to the ambitions of the London markets to secure a hotly tipped public offering in the UK’s booming tech sector.

PitchBook’s senior Emea private capital analyst Navina Rajan, comments: “Klarna’s decision to IPO in the US continues to evidence the prevalence of Fintech companies in our IPO pipeline outlined earlier this year. It also shows the brain drain across the pond from some of Europe’s largest private players in the IPO pipeline. We’ve seen the share of European companies listing on European exchanges has continued to decline from the 10-year low since last year and the valuation gap between both geographies for tech companies remains."