Klarna is reportedly weighing financial advisors for its U.S. initial public offering (IPO).
Goldman Sachs, J.P. Morgan Chase and Morgan Stanley were the top contenders to advise the Swedish payments FinTech, the Financial Times (FT) reported Tuesday (July 16), citing sources familiar with the matter.
The company, a pioneer in the buy now, pay later (BNPL) field, could list in the first half of next year, the sources said. A spokesperson for Klarna declined to comment on the possible IPO when reached by PYMNTS.
As the FT notes, Klarna was last valued at $6.7 billion in 2022 in a funding round that was deeply discounted at a time of rising interest rates and plummeting tech stocks. That valuation was a steep drop from the $46 billion the company had reached a year earlier, making it the most valuable startup in Europe.
Now, sources told the FT, Klarna and its advisors are confident the IPO market would stage a comeback in 2025 following a few turbulent years.
Sebastian Siemiatkowski, Klarna’s co-founder and CEO, told the FT in 2023 that the company was primed to go public, thanks to a sustainable business model and room for growth, but was holding out for stronger market conditions.
The company’s plans come as BNPL is becoming even more popular, according to research from “Merchants’ Evolving Perspective on the Value of Card-Linked Pay Later Plans,” a collaboration between PYMNTS Intelligence and Splitit.
That report shows that 85% of merchants said that the payment method was used more often during online checkout in the prior 12 months.
“Yet only one in four merchants surveyed reported that they would most prefer their individual customers to use BNPL at checkout,” PYMNTS wrote earlier this month. “In contrast, 38% said they would prefer that consumers use installment plans linked to existing general-purpose credit cards issued by any bank at checkout, and 34% said they would prefer that consumers use their own card and arrange the payment plan with their bank after the transaction is completed.”
Consumers, however, want BNPL options. Another PYMNTS/Splitit collaboration “Divided, Not Conquered: Acquirer and Merchant Confusion Clouds Split-Payments Landscape,” found that roughly half of Generation Z and millennial shoppers had used BNPL at least once in the previous year, with 23% of them increasing their BNPL usage in that period.
In addition, 79% of BNPL users said they were very or extremely satisfied with the experience.
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