Swedish payment giant Klarna applies for a US IPO, with a valuation significantly slashed from its peak of $46 billion.

Swedish financial technology company Klarna Bank AB, famous for its "buy now, pay later" services, announced on Wednesday that it has filed for its initial public offering with the U.S. Securities and Exchange Commission. The company stated that the number of shares to be issued and the proposed price range have not been determined yet. The timing of the listing will also depend on market conditions. Analysts have recently valued the company at around $15 billion. During the surge in financial technology and e-commerce stocks caused by the pandemic, the company's valuation peaked at $46 billion in a round of funding led by SoftBank Vision Fund 2. However, Klarna suffered an 85% writedown in its most recent major round of funding in 2022, when its valuation was $6.7 billion. In addition to SoftBank, Klarna's shareholders include Sequoia Capital and London-based Atomico. Klarna CEO Sebastian Siemiatkowski previously expressed concerns in interviews about Europe's unfavorable regulations on employee stock options potentially leading to talent drain towards American tech giants like Google, Apple, and Meta. The IPO plan has been brewing for some time. In an interview in February, Siemiatkowski mentioned that an IPO in 2024 was "not impossible." One of the company's main competitors, Affirm, went public in 2021 and is currently valued at around $18 billion. In August of this year, Klarna announced that it had achieved profitability in the first half of the year. Klarna's decision to list in the United States is a significant blow to European stock exchanges, as they have been encouraging local tech companies to list domestically. For example, the London Stock Exchange has been reformed to make the UK a more attractive market for tech companies, including allowing founders to issue dual-class shares, giving entrepreneurs more control over the company's strategy and direction. Siemiatkowski had not committed to a specific market for the IPO previously, with London being one of the markets he considered for Klarna. However, he indicated in 2021 that the likelihood of an IPO in the U.S. was higher than in the UK, partly due to the higher profile in the U.S. PitchBook analyst Navina Rajan noted that this is a continuing trend. "We see that since last year, the share of European companies listing on European exchanges has continued to decline from the lowest point in 10 years, and the valuation gap between tech companies in the two regions still exists." She added, "As of the third quarter of this year, the European IPO market has shown some signs of recovery."