The IPO implications for Klarna and other financial technologies evolve

Klarna Aims for U.S. IPO in September 2025

Swedish fintech giant, Klarna, has announced its plans for a U.S. Initial Public Offering (IPO) this September, resuming plans that were previously paused due to market volatility. The company aims to raise at least $1 billion with a valuation above $15 billion.

The timing of the IPO reflects improved market conditions and Klarna’s improved financial performance. In Q2 2025, the company reported a 20% revenue increase year-over-year to $823 million, a significant rise in active Buy Now Pay Later (BNPL) users, and resilient consumer credit behavior with low delinquency rates. Klarna also showed an adjusted operating profit, highlighting operational improvements amid a $53 million net loss due to restructuring and stock-based payments.

Klarna has been broadening its business model beyond its core BNPL offering. The company now operates as an Electronic Money Institution in the UK and offers banking services such as debit cards, cashback, and more. This diversification could increase investor interest due to its more bank-like profile, similar to consumer neobanks like Chime, which recently had a successful IPO.

The company's recent $26 billion scalable funding agreement with U.S. investment firm Nelnet supports its IPO narrative. This deal, involving the sale of future BNPL loan production, strengthens Klarna’s balance sheet flexibility and scale in the crucial U.S. market ahead of going public.

Market prospects for Klarna’s IPO are cautiously optimistic, acknowledging potential volatility early on, given the fintech’s growth trajectory, large active consumer base (about 100 million users across 26 countries), and expanding product suite. Regulatory scrutiny and credit risk in BNPL remain challenges, but Klarna’s strategy to present itself as a more responsible, bank-like entity could appeal to investors looking for sustainable fintech growth.

Klarna’s BNPL business accounted for almost 80% of its revenue in 2024, up from 70% in 2022. The US market is becoming increasingly important, contributing to an increase in revenue but also resulting in losses due to high costs. However, the US market is more profitable for Klarna due to higher fees charged to retailers and lower regulatory and bureaucratic costs.

The BNPL market is expected to be worth over $160 billion by 2032, and Klarna aims to quickly gain market share. The company has recently announced an exclusive deal with Walmart, making it the sole provider of BNPL for the world's largest retailer. Klarna does not expect to pay dividends in the foreseeable future and plans to reinvest possible profits into its business.

In addition to its core BNPL business, Klarna sells insights from its customers' purchase data to retailers, enabling them to run personalized ads. The company's revenues from this data business have grown from $18 million in 2020 to $180 million today.

Maximilian Wienke, an analyst at online broker eToro, believes Klarna has good chances of achieving its targeted valuation in the IPO. CEO Sebastian Siemiatkowski initially considered a direct listing without issuing new shares but eventually decided on a traditional IPO. Siemiatkowski cut costs in response to the startup's 2023 loss, reducing the workforce and slashing marketing budgets.

Lukas Homrich, a freelance journalist and member of the dreimaldrei journalists' bureau, writing about economic and financial topics with a particular interest in exploring business models, has been following Klarna's journey closely. The financial sector has seen the best performance among all sectors represented in the S&P 500, with a 7.6% gain over the past six months. Klarna’s IPO is being closely watched by other Fintechs and neobanks, potentially leading to more IPOs in the Fintech sector this year.