Swedish fintech giant Klarna is moving ahead with its long-anticipated public debut, seeking to raise up to $1.27 billion in a New York listing that will test investor appetite for tech companies still grappling with profitability and the fallout of past overvaluations.
According to its filing with the U.S. Securities and Exchange Commission (SEC), Klarna plans to offer 34,311,274 ordinary shares priced between $35 and $37 each. At that range, the offering would value the company at as much as $14 billion — far below its $45.6 billion peak valuation in June 2021, when SoftBank led a major funding round. Goldman Sachs, JP Morgan, and Morgan Stanley are acting as joint book runners for the deal.
The shares will trade on the New York Stock Exchange under the ticker symbol “KLAR.” Out of the shares on offer, Klarna itself is selling 5.56 million, while the bulk — roughly 28.8 million — will come from existing shareholders who are offloading part of their stakes.
From Pandemic Darling to Reality Check
Founded in 2005, Klarna pioneered the “buy now, pay later” (BNPL) model that became a global hit during the pandemic e-commerce boom. However, as interest rates rose and consumer credit risks increased, the fintech sector saw its valuations collapse. Klarna’s own value plunged by as much as 85% in 2022, to $6.7 billion, as worsening macroeconomic conditions, exacerbated by Russia’s invasion of Ukraine, pressured growth.
Despite that downturn, Klarna has been clawing back momentum. Revenue for the June quarter rose 20% year-on-year to $823 million. Still, losses remain a drag, with the company posting a $53 million net loss for the period — widening from a year earlier.
Klarna had initially planned to go public earlier this year, but pressed pause after U.S. President Donald Trump unveiled a wave of reciprocal tariffs on dozens of countries in April. The move unsettled global markets, raising fears of retaliatory measures and hitting the financial prospects of companies reliant on cross-border commerce.
Klarna, whose operations span Europe, the U.S., and beyond, chose to wait for calmer conditions before reviving its listing plans.
AI: From Overreliance to a Human-Centric Pivot
Beyond macroeconomic headwinds, Klarna has also faced internal turbulence tied to its aggressive embrace of artificial intelligence. Over the past two years, CEO Sebastian Siemiatkowski hailed AI as a cornerstone of cost efficiency, boasting last year that the company’s AI assistant was performing the work equivalent of 700 customer support agents. Klarna froze most hiring outside of engineering, eliminated over 1,200 external SaaS tools, and restructured teams to lean heavily on automation.
But those changes have produced unintended consequences. Employees across business operations, analytics, marketing, engineering, and legal have seen their roles eliminated and have been placed in an internal “talent pool” — a system critics describe as a quiet-layoff mechanism. Some, including senior staff, have since been reassigned to customer support roles under Chief Operating Officer Camilla Giesecke.
In a rare admission, Siemiatkowski told Bloomberg in May that his cost-cutting push “went too far,” leading to reduced service quality. He now says the company will reinvest in human support, even experimenting with a gig-work model for customer service agents.
“As cost unfortunately seems to have been a too predominant evaluation factor when organizing this, what you end up having is lower quality,” he said. “Really investing in the quality of the human support is the way of the future for us.”
That shift reflects a broader reassessment across industries about the limits of AI in consumer-facing roles. While companies like Amazon continue shrinking workforces through automation, others have stumbled. McDonald’s, for example, pulled its Automated Order Taker system from over 100 restaurants after viral blunders, while Starbucks reaffirmed its reliance on baristas rather than machines to boost customer experience.
Siemiatkowski himself has acknowledged this reality, remarking earlier this year: “We just had an epiphany: in a world of AI nothing will be as valuable as humans.”
IPO at a Crossroads
For Klarna, the IPO represents both a milestone and a gamble. While the company is still burning cash, its revenue growth and global footprint provide a foundation for investor interest. The offering will also provide liquidity for early backers such as SoftBank, Sequoia, and other venture firms, many of whom are looking to cash out after years of waiting.
Yet, the company enters public markets at a valuation less than one-third of its pandemic peak — a humbling reminder of how much investor sentiment has shifted in fintech. The offering also unfolds against a politically fraught backdrop, as Trump’s tariff policies inject uncertainty into the very trade flows companies like Klarna depend on.
With $1.27 billion on the line, Klarna’s IPO is more than a financial event; it is a referendum on whether investors still believe in the long-term viability of the BNPL model, and whether the balance between AI efficiency and human service can be struck in a way that restores consumer trust.
