Klarna's Journey from Stockholm to Wall Street: The Road to an IPO

In 2005, three students at the Stockholm School of Economics – Sebastian Siemiatkowski, Niklas Adalberth, and Victor Jacobsson – entered their school's annual entrepreneurship contest with a simple mission: to make online payments easier. That idea laid the foundation for what would become Klarna – one of the most prominent players in the global fintech space today.

Over the years, Klarna has evolved into a dominant force in the "buy now, pay later" (BNPL) segment and beyond. With continued global expansion, a focus on profitability, and a growing user base, the company is preparing for the next phase of its journey: going public.

• Global scale: Klarna has grown from a Swedish startup into a BNPL leader

• Innovative business model: Klarna's flexible payment offerings – including direct payments, pay-after-delivery, and installment options – are central to its "smooth shopping" philosophy.

• Strong backing: Klarna is backed by a notable investor roster, including Sequoia, Visa, Atomico, and Bestseller.

Klarna was founded in 2005 by Sebastian Siemiatkowski (also founder of Swedish investment company Flat Capital), Niklas Adalberth, and Victor Jacobsson. Initially named Kreditor, the company's early years were marked by the founders' relentless work on simplifying the complex maze of online transactions.

By 2007, its 1000th vendor sign-up was celebrated, and growth was continuously rapid; by 2008, the company was venturing into Denmark, Finland, and Norway, and by 2009, it rebranded to Klarna. This period also saw the launch of innovative services like installment payment solutions and Klarna Checkout, and it kept on significantly gaining market share.

In 2013, Klarna acquired SOFORT, further solidifying its foothold in the European payment solutions market. As of market share, the company had already by 2014 captured a remarkable 10% share in Northern Europe, and processed 30% of all online sales in Sweden.

Klarna's mantra is "smooth shopping," a philosophy that permeates every facet of its business model, from online to in-store experiences. This approach isn't just a catchy tagline; it's a comprehensive strategy aimed at redefining the shopping experience by offering flexible payment options that cater to the diverse needs of consumers worldwide. Some of its biggest competitors in this space are Block, Affirm, and PayPal.

Whether through their app or in partnership with retailers across the globe, Klarna ensures that customers can pay their way, enjoying the liberty to choose from direct payments, pay after delivery options, or installment plans like the flagship Pay In 4 program. This flexibility is complemented by a seamless, one-click purchase experience, epitomizing convenience and efficiency.

Further reading: The Payments Value Chain: A Complex System

An illustration of how a pay later transaction at Klarna works.

An illustration of how a pay later transaction at Klarna works.

Following a challenging period marked by a sharp devaluation in 2022, Klarna's financial performance has since rebounded. For 2024, the company increased its revenue to $2.81 billion, up from $2.28 billion in 2023. Klarna also rebounded to profitability in 2024, after reporting a net loss of $244 million in 2023.

Klarna has applied to list its shares on the New York Stock Exchange. The U.S. market, being Klarna’s largest in terms of revenue, is seen as a natural choice for the company’s stock market listing.

Additionally, CEO Siemiatkowski, has earlier hinted that a listing in the U.S. might be more reasonable from a visibility and regulatory standpoint. Also, the U.S. markets are in general more familiar with fintech and tech companies, potentially contributing to a more successful IPO.

In early 2025, Klarna filed its F-1 registration with the U.S. SEC, laying the groundwork for an IPO. Market watchers anticipate that Klarna may target a listing on the New York Stock Exchange under the ticker symbol “KLAR.” Final pricing and timing remain subject to market conditions.

Klarna's network growth since inception, now surpassing $100 in gross merchandise volume (GMV).

Klarna's network growth since inception, now surpassing $100 in gross merchandise volume (GMV).

Klarna's IPO is poised to be one of the most notable fintech debuts in recent years. As market dynamics shift and investor appetite for growth-stage companies improves, Klarna's strong fundamentals, profitable turnaround, and global reach could position it well for public market success.

With the U.S. as its largest market and fintech adoption continuing to accelerate, Klarna's next chapter may just be its most ambitious yet.