The archive · Money & Fintech · Strategic decision · 2005–2025
Klarna's BNPL bet goes public: $40 NYSE IPO, 15% debut pop after 20 years
Stockholm's buy-now-pay-later pioneer lists on NYSE at $40, raising $1.4B mostly for early investors; shares close +15% at $45.82.
Klarna
What the business is
Buy-now-pay-later credit and payments: Klarna lets shoppers split purchases into installments, serving over 100 million consumers and close to a million merchants, and now adds cards and deposit accounts.
Starting capital：First institutional check came from Sequoia in 2010; Sequoia's total investment across rounds reached $500 million.
How it started
Founded in Stockholm in 2005 by Sebastian Siemiatkowski, Niklas Adalberth and Victor Jacobsson. The bet: consumers would rather pay for online purchases after receiving them than pay upfront with a credit card. The founders were rejected and laughed at repeatedly in the early years; Sequoia's Michael Moritz wrote the first institutional check in 2010.
What happened
Klarna grew to over 100 million consumers, roughly $100 billion in cumulative gross merchandise value and close to a million merchants. In 2021 SoftBank led a round valuing Klarna at $46 billion; the private valuation later collapsed toward $6.7 billion as rates rose. The company cut costs with AI, including a widely publicized customer-service assistant, and filed to go public in early 2025 — then delayed when April tariff-driven volatility jolted markets.
How it ended up
Listed on the NYSE on September 10, 2025 at $40 per share, above its $35–$37 range. Shares opened at $52 and closed at $45.82, up 15%, valuing the company near $17.3 billion. The offering raised about $1.4 billion — mostly cash for existing investors selling 28.8 million shares; Klarna itself raised roughly $222 million. Sequoia, its largest holder at about 23%, realized around $2.65 billion in total returns.
Background
Klarna is the Stockholm company that turned 'buy now, pay later' into a mainstream consumer product: shoppers split purchases into interest-free installments instead of using a credit card, and merchants pay Klarna a fee for the boost in conversions. By 2025 the company said it served over 100 million consumers and close to a million merchants.
Founded in 2005 by Sebastian Siemiatkowski, Niklas Adalberth and Victor Jacobsson, Klarna grew through two decades of losses and repeated investor rejections. Sequoia wrote its first check in 2010 and invested $500 million in total. In 2021 SoftBank led a round at a $46 billion valuation — a peak that collapsed toward $6.7 billion as interest rates rose and BNPL economics were questioned.
The turnaround story that sold the IPO was profitability through AI: Klarna replaced much of its customer service with an AI assistant, cut costs, and returned to profit. It filed to go public in early 2025, delayed the listing when April tariffs rattled markets, then priced on September 9 at $40 — above its range — and debuted on the NYSE the next day, closing up 15% at $45.82 for a market value near $17.3 billion.
The $1.4 billion raised was mostly a liquidity event for early investors: existing holders sold 28.8 million shares worth about $1.2 billion at the offer price, while Klarna itself collected only about $222 million. Sequoia, still its largest shareholder at roughly 23%, sold only 2 million of its 79 million shares.
What has to be true
- The original bet was behavioral: consumers would rather pay after receiving goods than hand over card details upfront, and merchants would pay for the conversion lift.
- The 2021 SoftBank round priced Klarna at $46 billion; the private market later marked it down to about $6.7 billion, proving private valuations can overshoot.
- AI cost-cutting was the bridge to profitability, giving Klarna an efficiency story that public investors would buy.
- The IPO was mostly an exit for investors, not growth capital — 34.3 million shares sold, only 5 million from the company.
What can be applied
Private valuations can detach from fundamentals: the market re-priced Klarna from $46B toward $6.7B before the IPO, forcing profitability before new investors would buy the story.
Aftermath
As of the close on September 10, 2025, Klarna was a public company on the NYSE under ticker KLAR, valued near $17.3 billion after a 15% first-day gain. The listing made Sequoia's 15-year position worth roughly $2.65 billion in total returns, and co-founder and CEO Sebastian Siemiatkowski retained about 7.5% of the company without selling any shares. Klarna was pushing into banking, having signed 700,000 U.S. card customers with 5 million people on the waiting list, while facing proposed U.K. regulation of BNPL lending and competition from Affirm and Block's Afterpay.
Sources
- Klarna stock jumps 15% in NYSE debut after pricing IPO above range
- Klarna's IPO pops, raising $1.4B, with Sequoia as the biggest winner
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