Swedish buy-now-pay-later giant Klarna mulls share sale as it prepares for US IPO

Klarna, the buy now, pay later giant, is considering selling shares ahead of a possible blockbuster New York listing.

The Swedish lender has asked investment bank Goldman Sachs to advise on a secondary share sale, in which investors sell their shares to another party.

This would boost the valuation of Klarna, which plans to float in the United States next year. It could reach around 15.7 billion pounds ($20 billion).

Before rising interest rates spooked investors, Klarna was valued at £35.9 billion ($45.6 billion) in a 2021 fundraising.

Then, in 2022, its valuation fell to £5.3 billion ($6.7 billion).

Klarna, which was founded in 2005 by three founders including CEO Sebastian Siemiatkowski, is backed by investors including Japan’s SoftBank.

A buy now, pay later model allows borrowers to purchase goods or services and pay for them in installments.

But the system has come under intense scrutiny amid fears over a lack of regulation and the impact on customers who could fall into debt or rack up huge late fees.

News of a potential secondary sale of Klarna shares comes just days after Revolut said it was hoping to reach a valuation of £35 billion.

The rival fintech firm is selling shares worth almost £400m.

Revolut, which last month received a UK banking licence from regulators after three years, was valued at £26bn in 2021 following an initial share sale.