Klarna, the buy now, pay later (BNPL) financial giant, has overcome a crucial hurdle in its journey towards a stock market flotation expected to value it at up to $20 billion (£15.9 billion). .
Sky News has learned that the Stockholm-based consumer credit provider has won support from shareholders and regulators to establish a new UK-registered holding company.
Investors were told earlier this week that the approvals, part of preparations for a high-profile initial public offering (IPO), would result in them exchanging their Klarna Holding shares for Klarna Group plc shares within around ten days.
Investment banks have not yet been named for a New York IPO, with people close to the company saying the first quarter of 2025 – after the next US presidential election – now appears to be the most likely window for it to go ahead. .
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Sky News revealed last year that Klarna was creating a new British holding company to smooth the way to a public share sale.
The company, which employs around 5,000 people and has more than 150 million customers worldwide, has been examining the move for some time.
Its founder and chief executive, Sebastian Siemiatkowski, said in January that this was expected to happen “very soon”.
The decision to establish a holding company in Britain reflected the UK’s position from a legal, regulatory and capital markets perspective, sources said last year.
However, its listing in the US will be a disappointment to the London Stock Exchange, which has been pushing for Klarna to be listed in the UK.
Klarna was forced to reduce its valuation to $6.7 billion (£5.3 billion) in a 2022 funding round, having been valued at $46 billion (£36.6 billion) and receiving support from investors including Vision Fund from SoftBank, Sequoia Capital and Mubadala. the Abu Dhabi sovereign wealth fund.
Bankers believe that, based on a comparison with New York-listed Affirm Holdings, Klarna should attract an IPO valuation of between $15 billion and $20 billion.
Klarna’s corporate reorganization comes after the UK government appeared to back away from its crackdown on the BNPL sector.
Sky News revealed last July that ministers were planning to shelve new legislation to regulate providers such as Klarna, with future rules incorporated into a reformed Consumer Credit Act.
Consumer campaign groups responded with fury to the decision, which has not yet been announced by the government.
Last autumn, the Financial Conduct Authority said it had secured contract changes for BNPL customers following an explosion in the use of such products.
A survey published by the city’s watchdog showed that 27% of adults – around 14 million people – used BNPL at least once in the second half of 2023.
Klarna has already declared itself in favor of “proportional” regulation of the sector.
Klarna last year launched what it described as Britain’s first “credit opt-out” product to give consumers greater control of their finances.
He stated that the idea was suggested by Andrew Griffith, the city’s then minister, during a meeting with Siemiatkowski.
A Klarna spokesperson told Sky News on Tuesday: “Following our announcement last year, yesterday we notified investors that we have received the necessary regulatory and investor approvals to create a new UK-based holding company.”
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