New report suggests Klarna heading for a 67% valuation hit

By Oliver Smith on Friday 17 June 2022

Alternative Lending

Falling further from the buy now, pay later lender’s last raise at a $45.6bn price tag.

New report suggests Klarna heading for a 67% valuation hit
Image source: Sebastian Siemiatkowski/Klarna.

In a phenomenal changing of fortunes Klarna’s next funding round, once tipped as being at a valuation of up to $50-60bn, has reportedly been downgraded for a second time.

Last month the Wall Street Journal first reported that investors were looking for a c.30 per cent discount on Klarna’s last funding round when it was valued at $45.6bn—suggesting a new price tag of around $30bn.

Now the Wall Street Journal has reported that the round has been downsized again, aiming for a $15bn valuation according to “people familiar with the situation”.

At one point the buy now, pay later leader was said to be looking to raise up to $1bn as part of its upcoming round, but the Journal added that current talks were only for around $500m.

Obviously, this in-progress funding round is still in flux, and the Journal cautioned that there’s no guarantee that a deal would take place.

On the one hand, buy now, pay later has had a phenomenal few years, exploding in popularity during the pandemic and with Klarna reaching 150m global customers this year.

On the other hand, the cost of living crisis, stock market turmoil, rising inflation, changing consumer demand and a host of other factors are triggering turmoil across the stock market and among private company valuations.

Klarna’s listed rival Affirm has now seen its stock price plunge 90 per cent from a November 2021 high, meanwhile, tech giant Apple’s decision to enter the BNPL market will pile further pressure on existing players.

A Klarna spokesperson told AltFi that the Wall Street Journal report was “pure speculation and we do not comment on fundraising nor valuation speculation”.

Sign up for our newsletters

Your daily 7am download of all things alternative finance and fintech.

Fintech and alternative finance headlines with an exclusive Editor's Note each week. Delivered Monday at midday.

AltFi's new weekly US newsletter breaking down the ins and outs of America's burgeoning fintech sector. Delivered Monday 9am EST/ 6am PST.