Business

Fintech giant Klarna cuts ambition in fundraising

According to people familiar with the situation, Klarna Bank AB is considering raising new funds at a significantly lower valuation than a year ago, a sign of the difficult environment for tech companies.

The Swedish payments company is in talks with investors about a deal that could value the company at around $15 billion, people said, lower than it was targeting as recently as last month. The Wall Street Journal reported Klarna was in talks to raise up to $1 billion at a low valuation in the $30 billion range. One of the people said the current talks could raise at least $500 million. There is no guarantee that a deal will go through.

A $15 billion valuation would be a significant plunge for Klarna, which became Europe’s most valuable fintech startup last June when 9984 was sold by SoftBank Group Corp.
-4.24%
Vision Fund 2 led an investment that valued the company at $45.6 billion. Other investors include Sequoia Capital, Silver Lake and Dragoneer Investment Group LLC.

Klarna specializes in Buy It Now Pay Later services, a popular type of cash advance that rivals credit cards. The services are offered to customers at the point of purchase, mostly online, and allow them to pay for goods and services in installments without paying interest. Klarna makes money by charging merchants who offer Klarna’s services a fee.

An expanded version of this story appears on WSJ.com.

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https://www.marketwatch.com/story/fintech-giant-klarna-slashes-fundraising-ambition-11655484480?rss=1&siteid=rss Fintech giant Klarna cuts ambition in fundraising

Brian Lowry

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