Klarna confirms $800m funding, but bemoans "steepest drop in global stock markets in over fifty years"
The Swedish fintech's $800m funding round gives Klarna a post-money valuation of around $6.7bn.
Klarna has confirmed it has secured an $800m funding round at a post-money valuation of $6.7bn, a steep drop compared to its 2021 $45.6bn value, as investor sentiment sours towards the buy now, pay later giant.
In a combative press announcement, headlined "Klarna closes major financing round during worst stock downturn in 50 years", Klarna CEO and co-founder Sebastian Siemiatkowski bemoaned that its funding round took place "during possibly the worst set of circumstances to afflict stock markets since World War II".
Despite these headwinds, Siemiatkowski said it was a "testament to the strength of Klarna's business" that investors "recognised our strong position and continued progress in revolutionising the retail banking industry".
Siemiatkowski also pointed out that the valuations of Klarna's peers were suffering similar knocks.
Klarna said the funds will be used primarily to expand Klarna's footprint in the US.
The Swedish fintech, a pioneer of the buy now, pay later movement, has bagged funding from new investors, which includes Canada’s largest pension fund, Canada Pension Plan Investment Board (CPPIB) and the Abu Dhabi state investment fund Mubadala.
"Eventually, after investors emerge from their bunkers, the stocks of Klarna and other first-rate companies will receive the attention they deserve”.
The plummeting decline of what was once of Europe’s most valuable private companies, and Europe’s most valuable fintechs, indicates not only a marked cooling off of investor sentiment towards Klarna, which is facing increased regulation, but also cash-hungry startups.
Tech stocks, more broadly, have been having a rough time, amid challenging economic circumstances.
The $800m funding round gives Klarna a post-money valuation of around $6.7bn.
This is just a fraction of its whopping $45.6bn valuation last year when it raised a fresh $639m, following an earlier $1bn raise in the same year.
But its powering growth has halted recently, which was evidenced by it slashing 10 per cent of its nearly 7,000 employees in May this year.
Siemiatkowski said at the time: “We have seen a tragic and unnecessary war in Ukraine unfold, a shift in consumer sentiment, a steep increase in inflation, a highly volatile stock market and a likely recession.
“All of which have marked the beginning of a very tumultuous year.”