By Emily Bary and Mike Murphy
Klarna is listing on the New York Stock Exchange.
Companies with name recognition have been well-received in their Wall Street debuts lately. Will Klarna Group PLC join the club?
Early indications show strong demand for the financial-technology company’s initial public offering. Klarna’s IPO priced at $40 late Tuesday, well above its expected range of $35 to $37.
With Klarna selling roughly 34.3 million shares, the company raised about $1.37 billion through the offering. The IPO gives Klarna a total valuation of around $15.1 billion, based on its 378 million outstanding shares.
Klarna is expected to start trading on the New York Stock Exchange on Wednesday under the ticker symbol “KLAR.”
In recent months, Figma Inc. (FIG) and Circle Internet Group Inc. (CRCL) both saw their stocks pop in their trading debuts – in a sign of strong appetite for IPOs, and also a sign that underwriters left money on the table. Those stocks have come down from their highs, however.
Read: Klarna leads busiest week for big IPOs in four years. Will newly public stocks stay hot?
Klarna will also following in the footsteps of fellow fintech player Affirm Holdings Inc. (AFRM), which went public in early 2021. Affirm’s stock has been volatile since its IPO and is trading nearly 50% off its pandemic-era peak of $168.52. But Affirm shares have seen momentum recently as the company’s profit profile has improved and as new products have resonated. Affirm has a $29 billion market capitalization.
Both companies offer buy-now-pay-later services – and more. They’re trying to get more entrenched in consumer spending habits, through debit cards and other financial products. The companies have also taken different routes in their BNPL businesses, with Klarna focused more on things like “pay in four” payment options that let people split purchases into installments and Affirm opting more for interest-bearing offerings.
What that’s meant is a better profit profile for Affirm relative to Klarna, said Mizuho’s Dan Dolev. While the companies brought in similar amounts of revenue in the 12 months that ended in June – $3.1 billion for Klarna and $3.2 billion for Affirm – Klarna posted a $100 million net loss while Affirm notched $52 million in net income.
See also: Will Figma’s stock keep riding the AI hype? Wall Street isn’t so sure.
Klarna said in its IPO prospectus that it’s enacted a “deliberate balance of growth and profitability,” specifically in regards to its entry into the U.S. market. The company ran up 14 consecutive years of positive net income from 2005 to 2018 before splashing into new markets like the U.S. that required bottom-line tradeoffs.
While Klarna isn’t profitable by IFRS standards – the international equivalent to GAAP – the company said it generates a positive transaction margin, which is a payment-industry metric that measures revenue minus transaction costs.
The company bills itself as a more consumer-friendly alternative to banks that offer revolving-credit products. In a letter included in the prospectus, Chief Executive Sebastian Siemiatkowski said that banking “is about trust,” but traditional banks have instead profited from “late fees, overdraft penalties, revolving-debt traps and countless other tricks designed to exploit their customers.”
Klarna was founded in Sweden but “redomiciled” in the U.K. last year.
-Emily Bary -Mike Murphy
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09-09-25 2039ET
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