By Charlie Conchie
LONDON (Reuters) – Klarna’s upcoming U.S. initial public offering could help unlock a pipeline of British fintech flotations after a barren period for new technology listings, investors, lawyers and an executive told Reuters.
Stockholm-headquartered Klarna, best known for its buy-now pay-later products, publicly filed to float on the New York Stock Exchange earlier this month in its second attempt at listing on the public markets in four years.
It had looked to IPO in 2021, after shooting from a valuation of $5.5 billion to $45.6 billion in three funding rounds. But investors soured on tech companies as interest rates rose and economies stuttered, and the company was forced to cut its valuation to $6.7 billion in a 2022 fundraising.
Now it is back, and could be worth at least $15 billion in an IPO likely to be priced in the first half of April, one person with knowledge of the plans said.
“Any successful IPO of a high-profile business in the sector will be a catalyst for others to look again at an IPO as a strategic option for growth and/or liquidity,” said James Wootton, a partner at Linklaters, who advised money transfer company Wise on its 2021 listing in London.
At the peak of a post-pandemic fundraising boom in 2021, 101 fintech companies raised $296.86 billion via IPOs on global stock markets, according to data from PitchBook, compiled for Reuters. But between 2022 and 2024, just 86 firms raised $32.76 billion via IPOs.
Klarna’s plans have fuelled hopes of a resurgence.
“It’s quite clear that the market is looking to Klarna as a bellwether for future fintech IPOs, many of which are in a long pipeline,” said Tim Levene, chief executive of London-listed fintech investment fund Augmentum.
“We hope that Klarna is the first of many to list, which will prove a positive data point for the rest of the market.”
WAITING IN THE WINGS
Challenger banks Monzo and Starling, as well as payments companies Zilch and Ebury, are among the fintech companies considering plans to list at some point in the future, sources close to the companies told Reuters.
Zilch, which offers a competing buy-now pay-later product to Klarna, is currently aiming to float in 2026, Philip Belamant, its chief executive, told Reuters.
“The Klarna IPO will be a significant moment for the fintech sector, and we’ll be watching closely,” he said, adding that a successful IPO could “set the stage for greater investor confidence in European fintechs going public”.
Ebury, a Spanish-founded payments company majority owned by Banco Santander, is gearing up for a London listing by June at the earliest, one person familiar with knowledge of its plans said.
