Pay later, buy now company As a symbolic step towards a potential listing, Klarna has formed a holding company in the UK that will occupy the top spot in its corporate hierarchy.
The Stockholm-based startup Klarna, which allows customers to spread payments over time through installment plans, has started a formal entity restructuring to establish the holding company, a representative for the company confirmed to CNBC.
Sequoia and Heartland, two of Klarna’s biggest shareholders, have agreed to help with the new company’s preparations, according to the speaking representative.
Although the company is still in its “very early days” and does not currently have any intentions to go public, a Klarna representative stated that the move was a prelude to a formal listing.
The spokeswoman stated that Klarna has not yet chosen where it will list, and that the firm may not choose to go public in the UK only because it established a new legal entity there.
Nonetheless, it allows Klarna to choose the stock market that works best for them.
A Klarna spokesman sent an email to CNBC stating that the reorganisation “is an administrative adjustment that has been in the works for over 12 months and does not alter anyone’s roles, nor Klarna’s Swedish operations.”
“We will maintain our Swedish banking licence and remain the regulated financial holding firm overseen directly by the SFSA,” said Klarna Holding.
With a $6.7 billion market valuation, Klarna is a major participant in the European payments market.
It permits merchants to add checkout capabilities to their online storefronts, just like Stripe and PayPal do. Known for its flexible payment arrangements (buy now, pay later), it sets itself apart from these competition.
When Klarna brought on SoftBank as an investor, its valuation reached an astounding $46 billion during the zenith of the Covid-fueled e-commerce boom. Once the pandemic-induced surge in technology valuations subsided, its valuation plummeted by 85% to $6.7 billion.
Source (CNBC)
