Klarna shares climbed in their first day of trading on the New York Stock Exchange, marking a milestone for the Swedish buy now, pay later pioneer.
The stock rose 15% on Wednesday, closing at $45.82 after opening at $52. Shares were priced at $40 the day before, raising $1.37 billion for the company and its existing investors. The closing price valued Klarna at about $17.3 billion.
A Landmark for the Fintech
The IPO has been described as a turning point by CEO and co-founder Sebastian Siemiatkowski.
“To me, it really just is a milestone,” he said in an interview. “It’s a little bit like a wedding. You prepare so much and you plan for it and it’s a big party. But in the end — marriage goes on.”
Klarna joins a series of prominent Tech listings this year, reflecting renewed Wall Street enthusiasm for growth companies. Circle, the stablecoin issuer, and design software firm Figma have already seen strong debuts. Gemini, a cryptocurrency exchange, is expected to follow soon.
Expanding Beyond BNPL
Klarna’s listing comes as the firm attempts to diversify beyond its well-known installment lending model.
In recent months, the company has introduced a debit card and launched personal deposit accounts in the U.S. The Klarna Card has already attracted 700,000 American customers, with 5 million more waiting to sign up.
Siemiatkowski highlighted the card’s distinction from rival Affirm. “We’re attracting a slightly different audience maybe than the Affirm card,” he explained. “I get the impression that is more a card where people use it simply to be able to have financing with interest on slightly higher tickets.”
Competitive and Regulatory Pressures
Klarna faces stiff competition from Affirm and Afterpay, the latter acquired for $29 billion by Block in 2021.
The company must also navigate mounting regulatory scrutiny. In the U.K., regulators have proposed tighter oversight of BNPL products to ensure consumers can afford repayments.
Investor Returns
The IPO has already delivered significant windfalls for some of Klarna’s long-term backers.
Existing shareholders sold 28.8 million shares on the market, worth nearly $1.2 billion at the IPO price. Klarna itself raised $222 million in proceeds.
Sequoia Capital, an early investor that backed the firm in 2010, sold a fraction of its holdings but still achieved strong gains. The venture firm has invested $500 million in total, and its position is now valued at roughly $2.65 billion.
“Being here in New York 15 years later with over 100 million consumers and over $100 billion of GMV and close to a million merchants, it is staggering what one year after another of execution and growth and Sebastian’s long-term vision can do,” Sequoia partner Andrew Reed said.
However, not all investors have benefited. SoftBank, which led a funding round in 2021 at a $46 billion valuation, has seen its stake decline considerably in value.
Klarna’s debut offers an important test of how Wall Street will treat fintechs navigating rapid expansion, regulatory changes, and an evolving payments landscape.