Swedish fintech Klarna, which has operated a UK office in Manchester since 2019 alongside one in London, is in conversation with a number of top Wall Street banks about a possible New York listing, according to a report in the FT.
Blue-chip institutions Morgan Stanley, JP Morgan and Goldman Sachs are reportedly in lead positions to secure top roles in the potential listing of the buy-now pay-later firm, which could come as early as H1 2025.
At its height, Klarna was once one of Europe’s most valuable tech groups, peaking with a $46bn valuation in June 2021.
A sustained period of rising interest rates and economic instability have not been kind to the firm, however, and in May 2022 it announced plans to cut around 700 jobs, or around 10% of its workforce, globally. Staff in Manchester were among those affected by the cuts.
Despite the cuts, the firm’s website still describes the Manchester office as operating in the core fields of “business development, analytics, service and business operations” and its most recent valuation, for a July 2022 fundraise, put a $6.7bn price on its head.
The firm has been touting an IPO for some time. Last year Klarna’s co-founder and chief executive Sebastian Siemiatkowsk told the FT: “From an IPO perspective, the requirements have been met. So now its more market conditions.”
With interest rates down and more cuts expected, market conditions have undeniably improved in recent months.
Klarna offers around 150m active users the ability to delay or spread the cost of their purchases. The value of these purchases increased 17 per cent last year, while credit losses fell 32 per cent despite inflationary pressures on consumers.
Klarna was regularly profitable until 2019, when it decided it would accept some credit losses in order to chase US growth. It posted a net loss of 2.5bn kronor (£191m) last year, an improvement from its 10.4bn kronor (£794m) loss in 2022. Revenue for the full year jumped 22 per cent to 23.5bn kronor (£1.8bn).
