Swedish fintech giant Klarna has officially taken a major step toward its highly anticipated U.S. initial public offering (IPO) by making its F-1 prospectus public. This filing, released on Friday, signals the company’s intent to go public as it seeks to raise at least $1 billion at a valuation of $15 billion, according to Bloomberg.
The newly disclosed documents do not specify the number of shares Klarna plans to offer or the expected price range. Typically, these details emerge about a month or more after the prospectus becomes available, allowing investors time to evaluate the opportunity before the official pricing.
Investor Confidence Grows as Klarna Reports Profit
Klarna’s IPO has been long anticipated, and financial experts speculate that investor interest may already be strong. One factor fueling optimism is that Klarna’s private valuation recently climbed back to $14.6 billion after one of its investors increased its stake.
Additionally, Klarna has reported a major financial turnaround. In 2024, the company generated $2.8 billion in revenue, a significant jump from $2.3 billion in 2023. More importantly, it swung to a net profit of $21 million in 2024, a sharp contrast to its $244 million loss in 2023.
Founded in 2005 by CEO Sebastian Siemiatkowski, Klarna has become a dominant player in the “buy now, pay later” (BNPL) financing sector. Since entering the U.S. market in 2015, the company experienced explosive growth, reaching a valuation of over $45 billion by 2021. However, when the venture capital valuation bubble burst that same year, Klarna’s valuation plummeted by 85%, dropping to $6.5 billion.
In recent years, Klarna has focused on operational efficiency, particularly through artificial intelligence. The company developed its own AI-powered customer service system, built on OpenAI’s ChatGPT, and discontinued its contract with Salesforce CRM in favor of its in-house technology. CEO Siemiatkowski stated that Klarna’s AI-driven customer support bot enabled the company to replace 700 full-time contract employees, saving approximately $40 million annually.
AI advancements have also influenced Klarna’s hiring strategy. Instead of expanding its workforce, the company allowed natural attrition to reduce its headcount from 5,000 employees in 2023 to 3,500 by the end of 2024.
What’s Next for Klarna’s IPO?
With the F-1 filing now public, investors and analysts will scrutinize Klarna’s financials and strategy in the coming weeks. Whether the fintech firm meets its $15 billion valuation goal depends on market conditions and investor sentiment leading up to the IPO pricing.
As Klarna prepares to enter the public markets, its transition from a high-growth BNPL disruptor to a profitable AI-driven financial powerhouse will be closely watched. The success of this IPO could not only redefine Klarna’s future but also influence the broader fintech and BNPL landscape.
