Buy now, pay later giant Klarna is finally ready to file for IPO
BNPL players nearly collapsed postpandemic, but they are back, stronger and focused.
Buy now, pay later company Klarna is only days away from filing its long-awaited initial public offering. With aims to price the IPO in early April, the Stockholm-based fintech is targeting a valuation of more than $15 billion, per Bloomberg.
For what was once one of the world’s most valuable startups, hitting a $45.6 billion valuation at its peak, Klarna’s $15 billion target may seem modest. But after the market pulled back in 2022 and interest rates started rising, investors became increasingly cautious about tech startups that were losing money — unless they had some sort of AI angle, of course. Since then, the Swedish BNPL giant’s been slowly recovering, with its valuation rising to ~$14.6 billion last year.
Buy now, regret later
The rise and fall and rise again of Klarna’s valuation is essentially a microcosmic history of the entire BNPL space. By enabling users to split the cost of a purchase across interest-free installments, BNPL was hailed as a revolution, despite basically being, when all’s said and done, a rebranding of one of the most fundamental financial concepts: credit.
Faced with the pressure to stem its losses and become profitable, Klarna’s American rival Affirm has leaned more on interest-bearing lending, which made up 72% of its loans in 2024, a 33% year-over-year growth. Klarna itself even introduced a Klarna card, which it claims is different from a credit card, but the principals remain pretty similar — you can pay it off every month, or “choose to pay over 3 or 6 months with added interest.” Very credit card-y. The company’s also been busy striking new deals with key payment partners like Stripe and JPMorgan, while shedding businesses and staff to cut costs.
The initiatives for both Affirm and Klarna do seem to be making an impact on the bottom line: Affirm posted its first profit as a public company last month and Klarna almost broke even for the first time since 2019 in November.
Correction (March 7 2025): In an earlier version of this article, we incorrectly said that Affirm had stopped offering interest-free loans. This has been corrected.
