The European FinTech Klarna raises $800 million in common equity, eyeing a “leading market position” in the US. But a massive 85% drop to $6.7 billion in post-money valuation from $45.6 billion in June 2021, worries Klarna.
Klarna, however, succeeds in receiving funds even amid a steep fall in the global stock market sentiment. The recent market-breaking events include rising inflation and interest rates, possible recession, post-pandemic global economic slowdown, weaker supply chains, higher gas prices, Ukraine war-led pressures in the EU.
Regardless of the market pressures, the latest investors in Klarna include its founders, Sequoia, Bestseller, Silver Lake, and Commonwealth Bank of Australia. Fresh investors in Klarna are Mubadala Investment Company, sovereign fund of the UAE, and the Canadian Pension Plan.
“It’s a testament to the strength of Klarna’s business that, during the steepest drop in global stock markets in over fifty years, investors recognized our strong position and continued progress in revolutionizing the retail banking industry. Now more than ever businesses need a strong consumer base, a superior product, and a sustainable business model,” says Sebastian Siemiatkowski, CEO, Klarna.
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With this funds Klarna plans to expand in the US, as it has managed to emerge as a market leader. It shall now permit its 1000 smaller shareholders to take a pro-rata-basis part in the forthcoming weeks in its processes.
Klarna has over “30 million users, 60% brand awareness, and 30 of the top 100 US retailers.” Klarna’s volumes “tripled YoY from 2020-2021,” as it tapped on its launch in 11 new markets.
“The shift in Klarna’s valuation is entirely due to investors suddenly voting in the opposite manner to the way they voted for the past few years. The irony is that Klarna’s business, its position in various markets and its popularity with consumers and merchants are all stronger than at any time since Sequoia first invested in 2010,” says Michael Moritz, Partner, Sequoia.
