Swedish fintech firm Klarna is launching a U.K. holding company, seen as a significant step towards its much-anticipated initial public offering (IPO). The move was revealed on Monday and forms part of a broader legal restructuring within the company.
The 'buy now, pay later' service provider's last valuation stood at $6.7 billion, marking a substantial decrease from its peak of $46 billion during the pandemic-induced ecommerce surge. Despite this drop, which saw the firm's valuation fall by 85%, Klarna has managed to raise over $4 billion in funding to date.
The restructuring process has been endorsed by major shareholders including Sequoia, Silver Lake, Heartland, and Ant Group. This strategic move provides Klarna with greater flexibility regarding its choice of stock exchange for listing, while maintaining its Swedish operations and roles unchanged.
In an interview with Dow Jones Newswires, representatives from Klarna underscored the importance of this early phase in their journey towards floatation. However, they noted that details concerning the floatation's timing and place are yet to be finalized.
Klarna Holding will continue to operate under the supervision of the Swedish Financial Supervisory Authority (SFSA) as the regulated financial holding company with a Swedish banking license. The firm sets itself apart from competitors such as PayPal (NASDAQ:PYPL) and Stripe through its flexible payment schemes.
Following the deflation of the ecommerce boom, Klarna has made significant investments in artificial intelligence (AI) technology. The firm recently launched an AI image recognition tool and reported its first profitable month since 2020. Recognized among CNBC and Statista's top 200 fintech companies, Klarna has demonstrated a commitment to innovation in a rapidly evolving industry.
In related news, Klarna and Clearpay's parent company Block have voiced opposition against the U.K.'s new regulatory plans for the 'buy now, pay later' industry, particularly over Amazon (NASDAQ:AMZN)'s exemption from these rules. Meanwhile, Klarna has successfully reached a deal with its Swedish workers to prevent a potential strike.
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