Klarna’s Wall Street Debut Hits $19 Billion Valuation

Swedish buy-now, pay-later giant Klarna has made a strong debut on Wall Street, with its shares surging on the first day of trading to give the company a market value of over $19 billion (£14 billion).

Klarna, founded in 2005, has built its reputation as a disruptor to traditional banking and credit card systems, allowing shoppers to pay for purchases in smaller, interest-free instalments. The service has grown to roughly 93 million active users across 26 countries, including the UK, where it launched in 2014, and the US, where it expanded in 2019. In Sweden, its home market, more than 80% of adults used Klarna last year, according to company data.

The company raised $1.37 billion through its initial public offering (IPO), with shares priced at $40 each. Trading opened at $52, marking a 30% surge that initially pushed Klarna’s valuation past $19 billion. However, by the end of the day, shares settled around $46, valuing the firm closer to $17 billion.

This IPO represents a recovery for Klarna, whose valuation once soared to $45 billion following a major investment by SoftBank Group in 2021. Since then, an economic slowdown and rising interest rates have weighed on the fintech sector, forcing the company to recalibrate.

Klarna processed $105 billion worth of transactions last year and reported $2.8 billion in revenue, a 24% year-on-year increase. However, expansion into the US has come at a cost, with the firm posting a $52 million loss in the three months ending June – up from a $7 million loss during the same period last year.

Despite concerns that buy-now, pay-later services encourage overspending, investors like Joakim Dal, partner at GP Bullhound Investment Management, argue that Klarna is more of a payments facilitator than a traditional lender.

“In our view, it’s more of a payment company than a lender,” Dal told the BBC’s Opening Bell. “The late payment rates are very low. Klarna is about creating a seamless payment experience rather than pushing credit.”

The listing was initially scheduled for April but was delayed due to market volatility following US tariff announcements. Its successful debut comes amid a wave of tech IPOs, with other firms, including crypto exchange Gemini, planning to go public in the same week.

Klarna CEO Sebastian Siemiatkowski celebrated the milestone in a message to employees, calling it a key step as the company seeks deeper penetration into global markets.

“For any tech company aiming to go public, Wall Street is the ultimate destination,” Dal added. “It offers the most liquidity, the widest analyst coverage, and the strongest valuations.”