Klarna IPO: Stock Climbs 15% in Trading Debut

Klarna stock made its trading debut on the New York Stock Exchange today. A view of the NYSE building on Wednesday morning. (Michael Nagle/Bloomberg)

Klarna Group, the Swedish buy-now, pay-later service provider, began trading on the New York Stock Exchange on Wednesday after opening at $52 a share.

A total of 34.3 million shares began trading under the ticker KLAR. This makes up roughly 9% of a total 378 million shares outstanding after the initial public offering.

Shares ended the session at $45.82, or 15% above the price of $40 a share Klarna’s underwriters set on Tuesday evening. The fintech raised $1.37 billion from the sale. Based on Wednesday’s closing price, Klarna’s valuation is $17.4 billion.

The fintech’s successful initial public offering marked “an important milestone for the fintech industry,” with its aftermarket performance serving as a bellwether for future debuts, Johnathan Langlois, strategy leader for U.S. payments at KPMG, told Barron’s.

Klarna’s stock sale comes amid a hot market for IPOs. In the past few months, tech companies including stablecoin issuer Circle Internet Group, software maker Figma, and cryptocurrency exchange Bullish have made their debuts. Gemini Space Station, another crypto play, is set to go public later this week.

Created with Highcharts 9.0.1KlarnaStock ticker: KLARSource: FactSetAs of Sept. 10, 4 p.m. ET

Created with Highcharts 9.0.1IPO priceSept. 102 p.m.3 p.m.4 p.m.35.037.540.042.545.047.550.052.5$55.0

“There’s a credibility that unquestionably comes with doing this,” Chief Commercial Officer David Sykes told Barron’s in an interview ahead of Klarna’s first trading day. “This is a signal to our customers, merchant partners, you name it, that we’re sort of the real deal.”

Klarna was founded in 2005 as a BNPL service provider, but it has since expanded into other areas in an effort to take on the banking sector. Today, its product portfolio includes both a credit and debit card. The company also holds a full banking license in the European Union.

While the fintech filed registration documents for its IPO in March in preparation of its trading debut, President Donald Trump’s “Liberation Day” tariffs disrupted those plans. Markets were thrown into disarray in April when Trump unleashed a hailstorm of levies on U.S. trading partners.

It makes sense for Klarna to trade on a North American exchange. The U.S. market is Klarna’s largest, and one where the company has scored key partnerships with Walmart and eBay, bringing its name further into the public eye.

That isn’t to discount the company’s continued presence in Europe. “In Germany, it’s not an exaggeration to say Klarna is a household name in the way Visa or PayPal is,” CCO Sykes said. “There’s no question we have an outsized role in those economies as a financial institution.”

Klarna has also been expanding globally. The fintech works with merchants in 26 countries, and has seen its user base grow by 26 million active consumers in the past 12 months alone.

Klarna may face investor scrutiny in the days following its debut. The company made headlines in May when it revealed that customers were defaulting on their loans, which contributed to a first-quarter net loss of $99 million. In the second quarter, that metric swelled to $52 million from $18 million a year earlier.

“It is natural that as you build a portfolio, you will have, on an absolute basis, higher provisions,” Chief Financial Officer Niclas Neglen told Barron’s. “The actual loss outcome of any single consumer is not worsening.”

A record number of transactions were paid early or on time in the second quarter, Neglen added. “We’ve been around for 20 years, we continue to expand. And I think people recognize that this is a very valuable, very sustainable product,” he said.

Greg Martin, managing director at Rainmaker Securities, described Klarna’s journey to the public markets as “disciplined.” The company’s valuation peaked at $45.6 billion in 2021, only to drop to $6.7 billion the following year, he noted.

While that was a setback at the time, the following years of sustainable valuation growth generated a positive trajectory for an IPO, Martin told Barron’s. “This has clearly served them well, as investors are buying into the long-term growth story at Klarna.”

Write to Mackenzie Tatananni at mackenzie.tatananni@barrons.com