Klarna valued at $19 billion after U.S. IPO debut

Klarna's shares jumped on their U.S. market debut on Wednesday, giving the Swedish buy‑now, pay‑later lender a market value of more than $19 billion and raising $1.37 billion in the company's initial public offering.

The firm sold shares for $40 apiece in the IPO and opened trading at $52, a rise of about 30% from the offering price. The flotation allowed long‑standing investors, including U.S. venture capital firm Sequoia Capital, to realise gains on part of their holdings.

Founded in 2005, Klarna is known for allowing shoppers to split purchases into smaller, often interest‑free, instalments. The company reports roughly 93 million active users across 26 countries and said it handled about $105 billion of transactions last year. More than 80% of adults in its home market of Sweden used the service in the past year, the company said.

Klarna's growth has not erased concerns about profitability and consumer risk. The company reported revenue of $2.8 billion last year, up 24% from the prior year, but also posted a $52 million loss in the three months to June, compared with a $7 million loss a year earlier. Executives have said expansion in the U.S. has increased processing and operating costs, weighing on margins.

The firm's market value after the debut remains well below a 2021 valuation of more than $45 billion following an investment by SoftBank Group. Market conditions delayed an earlier planned listing in April after U.S. tariff announcements unsettled financial markets, but the broader recovery in U.S. indexes helped pave the way for the flotation.

Klarna's chief executive, Sebastian Siemiatkowski, told staff the listing would provide "fuel" for the company as it seeks to expand further into new markets. The IPO also underscored a broader trend of technology companies returning to Wall Street to tap deeper pools of liquidity and analyst coverage.

Industry observers note that Klarna's principal revenue source is fees charged to merchants for enabling purchases through its pay‑later service rather than interest charged to consumers. Joachim Dal, a partner at GP Bullhound Investment Management, said investors may have underestimated that aspect of the business, calling Klarna "more of a payment company than a lender" and pointing to relatively low rates of late payments.

Regulators and consumer advocates have raised questions about the buy‑now, pay‑later model and whether it encourages consumers to spend beyond their means. Klarna and other firms in the sector have said they conduct credit checks and provide tools aimed at helping customers manage payments.

Several other companies, including the cryptocurrency firm Gemini, have signalled plans for public offerings this week, seeking to capitalise on improved market sentiment. Market participants said Wall Street remains the preferred venue for many technology and financial‑technology companies because of its depth and the potential for higher valuations.

Klarna's debut will be closely watched for indications of investor appetite for other fintech and consumer finance listings, and for how the company balances continued growth with the profitability pressures it has experienced while expanding internationally.