Klarna, known for its “buy now, pay later” service, has created a registered company in the United Kingdom. This strategic move places it at the top of its corporate structure, symbolically paving the way for a future IPO.
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A Klarna spokesperson confirmed to CNBC that the Stockholm-based company, which allows shoppers to defer their payments in extended installments, has initiated a legal entity reorganization to create a parent company.
The spokesperson announced that preparations for the new company have been agreed upon with some of Klarna's largest shareholders, including Sequoia and Heartland.
A Klarna spokesperson said the move was a precursor to an official listing, but added that these are still “very early days” and the company has no immediate plans for a public listing.
According to a Klarna spokesperson, the company has not yet decided on which stock exchange it will list its shares on. Furthermore, the creation of the company’s new legal entity in the United Kingdom does not necessarily mean that it will conduct a public offering of shares there. However, this gives Klarna flexibility in choosing which stock exchange it decides to end up on.
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The reorganization “is an administrative change that has been in progress for over 12 months and does not affect anyone’s roles or operations in Sweden,” a Klarna spokesperson told CNBC via email.
“Klarna Holding will continue to be a regulated financial company under the direct supervision of the SFSA and we will continue to have a licensed bank in Sweden.“
Klarna is a major player in the European payments market, valued at $6.7 billion.
Like PayPal and Stripe, it allows merchants to add checkout functionality to online stores. Unlike these competitors, it differs in its flexible payment plans, also known as buy now, pay later.
During the Covid-19 -induced e-commerce boom , Klarna was valued at a staggering $46 billion after attracting SoftBank as an investor . However, its value has fallen by 85% to $6.7 billion after the pandemic -induced slowdown in tech development .
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Klarna is a payments and financial services company that offers flexible payment solutions for consumers and merchants. The company was founded in Sweden in 2005 and has expanded globally, serving millions of customers and merchants in many countries.
Klarna offers various payment options for consumers. Users can choose to pay immediately by card or bank transfer, but they can also choose the Pay Later option which allows the purchase without immediate payment. Customers can pay the amount later, usually within 14 or 30 days, depending on the option they have made.
Klarna offers many benefits to both consumers and merchants. For consumers, it provides flexibility and payment options, allowing them to purchase products without having to pay immediately. For merchants, Klarna offers increased sales and reduced risk of non-served payments, as it takes on the role of the payer and assumes the risk of payment.
Source: cnbc
