Klarna Group plc, the Stockholm-founded buy now, pay later (BNPL) fintech, has officially kicked off its initial public offering after a prolonged wait. On September 2, 2025, Klarna announced the launch of its IPO, offering about 34.3 million ordinary shares on the New York Stock Exchange under the ticker “KLAR” . Approximately 5.56 million of those shares will be newly issued by the company, while the remaining ~28.8 million are being sold by existing shareholders . The expected price range is $35 to $37 per share, which would value Klarna at up to roughly $14 billion . At the top end of that range, Klarna stands to raise about $1.27 billion in gross proceeds . Major global banks including Goldman Sachs, J.P. Morgan, and Morgan Stanley are leading the underwriting syndicate for the offering , underscoring the significance of this listing in the fintech sector.
This IPO is among the most anticipated tech listings of 2025, marking a cautious revival in the tech IPO market after a dry spell. Investor appetite for high-growth tech stocks had been muted for a few years, but steadier markets in 2025 have encouraged companies like Klarna to test the waters again . Recent successful debuts of other fintechs and digital finance firms signaled that the window for public offerings is reopening . Klarna’s debut, in particular, is seen as a bellwether for the BNPL and broader fintech space – its outcome will gauge whether investors are ready to once again bet on fast-growing, but previously overhyped, fintech startups . A strong reception could ignite confidence and pave the way for other late-stage startups to follow, while a lukewarm result might remind founders that even decacorns aren’t immune to skepticism .
From Peak Valuation to Delay
Klarna’s road to the public markets has been anything but straightforward. Just a few years ago, Klarna was Europe’s most valuable startup, with a private valuation that soared to $45.6 billion in 2021 at the height of the BNPL boom . Fueled by multiple funding rounds between 2020 and 2021, the company’s valuation rocketed from $5.5 billion to an eye-watering peak in the mid-$40 billions . There was even talk of an imminent market debut back then – CEO Sebastian Siemiatkowski reportedly considered a direct listing in 2021, aiming to capitalize on the fintech frenzy .
However, Klarna’s fortunes swiftly changed course, offering a stark lesson in how fast fortunes can change in the startup world . By mid-2022, as market conditions deteriorated with rising interest rates and investor skepticism toward unprofitable tech, Klarna’s lofty valuation came crashing down. The company shelved its listing plans and instead raised a private down round that plummeted its valuation to $6.7 billion, an astonishing ~85% drop from its peak . This humbling turn of events – a nearly 69% fall from its once $45+ billion perch – turned Klarna into a case study of tempered expectations . The BNPL sector overall was hit hard during this period; soaring inflation and regulatory scrutiny made investors question the sustainability of “growth-at-all-costs” fintech models. In Klarna’s case, it responded by aggressively cutting costs, including a 10% reduction of its workforce, and seeking capital at progressively lower valuations to weather the storm .
Even after surviving the 2022 downturn, Klarna had to remain patient about going public. Volatile market conditions repeatedly delayed its IPO. In fact, Klarna confidentially filed for a U.S. IPO in early 2025, only to pause those plans in April 2025 amid a sudden spike in market volatility . An unexpected announcement of new U.S. trade tariffs sent global markets into a jittery selloff, prompting Klarna’s management to hit the brakes on the offering at the last minute . This springtime hiccup showed that even in 2025, external macro surprises could derail an IPO timeline. It wasn’t until late summer 2025, with markets stabilizing and stocks near record highs, that Klarna felt confident enough to revive its IPO ambitions . Now, roughly 18 years after its founding in 2005, and after years of speculation and at least one false start, Klarna’s long-awaited market debut is finally in motion .
Rebounding with Improved Fundamentals
One reason Klarna can finally proceed with its IPO is that it used the intervening time to strengthen its business fundamentals. After the 2022 reckoning, the company pivoted from breakneck expansion to a focus on efficiency and profitability. These efforts are bearing fruit: Klarna reported a 24% surge in revenue in 2024, reaching $2.81 billion . More impressively, it swung from steep losses to a modest profit – booking a net profit of $21 million in 2024 after a $244 million loss the year before . This marked the first full-year profit for Klarna since 2018, highlighting a significant turnaround in its operating performance. In recent quarters, Klarna’s management has deliberately shifted gears from hyper-growth to “measured” growth with an eye on the bottom line, and it shows in the narrowing of losses and improving margins . The painful belt-tightening measures (slashing operating costs and headcount) appear to have stabilized the business , putting Klarna on a more sustainable path as it enters the public markets.
Klarna’s core business also demonstrated resilience amid economic headwinds. The BNPL pioneer continued to grow its user base and merchant network through the turmoil. As of mid-2025, Klarna boasts over 111 million active consumers and roughly 790,000 merchants across 26 countries . Consumer adoption remains strong – even in a higher interest rate environment – with younger shoppers still drawn to the flexibility of installment payments. Klarna has also expanded its product offerings (for example, rolling out a Klarna Card in the U.S. and obtaining a full banking license in Europe) to diversify revenue beyond the classic pay-in-4 BNPL loans . Moreover, credit metrics have improved: the company noted that a record number of transactions were paid on time or early in Q2 2025, and loan default rates fell to 0.89%, indicating that fears of spiraling credit losses have so far been managed . All these factors helped rebuild investor confidence in Klarna’s model. By mid-2025, private-market trading of Klarna’s stock implied a valuation back in the mid-teens of billions, signaling that the company had partially clawed back its lost valuation (though still far below the 2021 peak) .
Key Lessons for Startup Founders
Klarna’s dramatic rise, fall, and resurgence provide a rich learning opportunity for entrepreneurs. Here are some key lessons startup founders can take away from Klarna’s IPO journey:
- Timing Is Everything: Just because a company can go public doesn’t mean it should – at least not right away. Klarna waited through a years-long IPO drought and chose to list when market conditions showed signs of recovery . It even pulled back an offering in early 2025 when volatility spiked, showing that patience and timing can make the difference between a flop and a successful debut. Founders should gauge the broader market sentiment and be willing to postpone big moves until the environment is favorable .
- Be Ready to Pivot and Adapt: The path to success is rarely linear. Klarna’s team had to pivot their strategy when circumstances changed – aborting a planned 2021 direct listing and raising emergency private funding in 2022 when the market turned . This flexibility (choosing a down round over a risky IPO) likely saved the company. Startup leaders should always have a Plan B (or C) and remain agile, whether it’s altering go-to-market plans, funding strategies, or product focus, when the situation demands it.
- Valuations Can Swing Wildly: Klarna’s story is a cautionary tale about sky-high valuations. In 2021 it was a $46 billion superstar, and a year later it was worth a fraction of that . Such volatility underscores that today’s hype can become tomorrow’s headache. Founders should avoid getting blinded by inflated valuations in boom times – and conversely, not be demoralized by downturn valuations. What matters is building a real business; market sentiment will zigzag. Klarna’s nearly 70% valuation collapse and subsequent partial rebound show that valuation is temporary, but execution is what endures .
- Focus on Fundamentals and Profitability: When the tide went out on easy money, Klarna had to refocus on fundamentals. The company aggressively cut costs, streamlined operations, and pushed toward profitability – and by 2024 it managed to flip to a profit while growing revenue 24% . For startups, the lesson is clear: high growth is great, but sustainable unit economics and a path to profitability are crucial for long-term viability. Investors eventually ask, “Can you make money?” Klarna’s turnaround suggests that answering that question convincingly is key to restoring faith when hype fades.
- Expect the Unexpected (External Shocks): Finally, Klarna’s IPO journey illustrates how external factors beyond your control can upend plans. From regulatory pressures on BNPL, to rising interest rates, to an out-of-left-field trade tariff announcement that temporarily derailed its 2025 IPO , Klarna weathered many surprises. Startup founders should always plan for contingencies – whether it’s having extra cash reserves, diversifying markets, or simply the willingness to pause and wait out a storm. The ability to stay calm and make strategic decisions under unpredictable conditions is a hallmark of resilient companies.
Klarna’s experience – climbing to the top, stumbling, and climbing back – serves as a vivid example of the rollercoaster many startups face on the road to an IPO. By learning from its journey, founders can better navigate their own ventures through exuberant highs and challenging lows. In the end, Klarna’s long-awaited IPO isn’t just a fintech news event; it’s a story about perseverance, adaptability, and strategic patience that any entrepreneur can appreciate. The overarching takeaway: build a business that can survive the tough times, and you’ll be ready to thrive when the market’s wind blows in your favor. And reach to us.
