Swedish fintech giant Klarna is set to revive its long-awaited initial public offering (IPO) in the United States next month, targeting a valuation of between $13 billion and $14 billion, Reuters reports, citing two people familiar with the matter.
The move marks a significant step forward for the buy-now-pay-later (BNPL) pioneer, but at a valuation far below the $50 billion peak it once commanded during the pandemic-era boom.
The company, which had paused its listing plans in April after President Donald Trump’s sweeping tariffs rattled global markets, appears emboldened by the recent resurgence in U.S. equities and a string of blockbuster IPO debuts that have rekindled investor appetite. Klarna had previously considered going public in 2021 but opted to wait.
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Shares sold in the offering could be priced at between $34 and $36 as early as this week, one of the sources said. The company is expected to raise close to $1 billion through the IPO.
A Leaner Klarna Ahead of Market Debut
A major backdrop to Klarna’s renewed listing attempt is its sharp workforce reduction, which has fundamentally reshaped the company. In May, Klarna revealed that it had cut nearly 40% of its workforce, attributing the downsizing to a mix of artificial intelligence integration and natural attrition.
Chief Executive Officer Sebastian Siemiatkowski, speaking on CNBC’s Power Lunch, confirmed the scale of the cuts.
“The truth is, the company has shrunk from about 5,000 to now almost 3,000 employees,” he said. “If you go to LinkedIn and look at the jobs, you’ll see how we’re shrinking.”
While Klarna described the reductions as part of a broader technological shift, analysts believe the cuts are also linked to the company’s IPO preparation, aimed at presenting a leaner, more profitable profile to investors after years of rapid but costly expansion.
Valuation Slide
The anticipated $13–$14 billion valuation marks a steep decline from Klarna’s once lofty heights. At its peak in 2021, amid a global surge in e-commerce and BNPL adoption, Klarna was valued at close to $50 billion, briefly making it Europe’s most valuable startup. Even earlier this year, its valuation exceeded $15 billion before recent market recalibrations.
The scale of the drop underscores the sobering reality for many fintechs that soared during the pandemic but have since faced investor skepticism about long-term profitability, regulatory scrutiny, and rising competition from traditional banks and tech giants expanding into payments.
IPO Tailwinds
Despite the lower valuation, Klarna’s timing may be favorable. Equity markets have shown strength in recent months, buoyed by robust earnings and an improved risk appetite. The IPO window, which had been largely frozen during much of 2022–23, has reopened with notable success stories.
Design software maker Figma and stablecoin operator Circle have delivered extraordinary gains since their listings this year, with shares peaking 333% and 864% above their IPO prices, respectively. Data compiled by LSEG shows that the 20 biggest U.S. IPOs this year have averaged a 36% first-day share price rise, fueling optimism for upcoming offerings like Klarna’s.
Operationally, Klarna has continued to show resilience even amid restructuring. Earlier this month, the company reported that its second-quarter revenue rose 20% year-on-year on a like-for-like basis to $823 million, while adjusted operating profit climbed to $29 million, up by $1 million from the prior year.
Customer growth has also been strong. Active users rose 31% year-on-year to 111 million, signaling continued global demand for its BNPL services, particularly among younger consumers seeking flexible payment options at checkout.
Klarna’s revival of its U.S. IPO plan highlights a balancing act between investor confidence, market conditions, and its own restructuring. The workforce cuts suggest an effort to realign its cost structure with profitability goals, especially as AI-driven efficiencies reduce the need for human labor. Yet the steep drop in valuation illustrates how fintech optimism has been tempered since 2021, when cheap capital and booming online shopping fueled sky-high valuations.
The company’s ability to raise close to $1 billion, if achieved, would provide fresh capital to support expansion and fend off intensifying competition from rivals such as Affirm in the U.S. and PayPal’s BNPL services. But investor sentiment may hinge on whether Klarna can sustain profitability without sacrificing growth. However, the confluence of stronger equity markets and robust IPO performance gives Klarna a much-needed tailwind.