A big day on Wall Street
Swedish financial technology behemoth Klarna splashed down on the New York Stock Exchange this week when its hotly awaited initial public offering (IPO) rose 30% at the start. The stock was priced at $40 on Tuesday but opened Wednesday at $52 before inching back to $45.82 at the close. That closing price still placed the company at around $17.3 billion—a notable milestone for a firm perhaps best known for its “buy now, pay later” (BNPL) services.
CEO Sebastian Siemiatkowski termed the IPO a symbolic moment. “It’s like a wedding,” he told CNBC in an interview. “You prepare so much and you plan for it, and it’s a big party. But ultimately—marriage goes on.”
Klarna’s road to going public
It was founded in 2005 in Stockholm and is currently one of the leading fintechs in the world, serving more than 100 million customers across 45 countries. Its BNPL flagship product enables consumers to pay for goods in smaller installments, typically interest-free.
Since its inception, Klarna has diversified into products like debit cards, current accounts, and money management products. Already, more than 700,000 people use the Klarna Card in the United States alone, with another 5 million ready to do it.
The IPO raised a combined total of $1.37 billion, with $222 million immediately going to Klarna and the remainder to current shareholders who offloaded parts of their stake.
Hanging loose on the fintech and AI wave
Klarna’s IPO is just one facet of a broader trend for high-profile technology IPOs in 2025. Other businesses, such as Figma and Circle, have already made investors’ jaws drop, with cryptocurrency exchange Gemini going public later this week.
Wall Street appears starved for new opportunities, and Klarna is the perfect recipe: precisely placed where fintech, e-commerce, and consumer credit meet. Investors are especially interested in Klarna’s expansion into banking and its ability to challenge incumbent lenders as well as others like Affirm and Afterpay.
Competition and challenges
But the future is not smooth sailing. Klarna is in for a rough ride by Affirm, Afterpay, and legacy credit card issuers. Over 2 million card users are already signed up by Affirm, and Afterpay was acquired in 2021 for $29 billion by Block, whose brand is Square.
There are also upcoming regulation challenges. In the U.K., there are new proposals to cover more volumes of BNPL products with tighter regulation. The regulators have concerns regarding affordability and the likely risk that consumers will end up taking on debt they cannot afford to repay. The same is happening in the U.S. and Europe.
Big Wins and big losses for investors
Klarna’s IPO also brought enormous windfalls to some of the company’s early investors. Sequoia, the venture capital group that first invested in Klarna back in 2010, has turned its $500 million stake into around $2.65 billion. Sequoia still holds the vast majority of its shares, which is a testament to its belief in Klarna’s future.
While not everyone is partying, Japan’s SoftBank, the leader of the 2021 round that valued Klarna at $46 billion, has watched its stake lose value. At today’s valuation, that doesn’t look so great.
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What’s next for Klarna?
Now that the IPO is off the table, Klarna then has to prove that it can generate more profit while growing in size. It will live on by balancing on a tightrope of innovative and cautious lending with regulation hanging over its head.
For consumers and retail investors alike, the IPO is further proof that fintech is not going anywhere. Klarna’s move into bank products is a sign that it’s not just a BNPL player — it’s attempting to be an end-to-end financial partner.
As Wall Street watchers, one can be certain: Klarna’s in the big leagues now, and its sequel act is warming up.
