Klarna, a Swedish company specializing in buy now, pay later (BNPL) services, saw its shares rise nearly 15% during its first day of trading on the New York Stock Exchange. The stock opened at $52 per share, which was 30% above its initial pricing of $40. Shares peaked at $57 before closing at $45.82, marking a 14.6% gain.
The company sold more than 34 million shares, raising approximately $1.37 billion from investors and making it the largest initial public offering (IPO) of the year according to Renaissance Capital. This follows a period with several high-profile IPOs, including Figma and Circle Internet Group. Market participants are also anticipating future listings from companies such as StubHub and Gemini.
Founded in 2005 as a payments provider, Klarna entered the U.S. BNPL market in partnership with Macy’s in 2015 and has since expanded to hundreds of thousands of merchants globally. The service is integrated into browsers and digital wallets as an alternative to credit cards and recently announced a partnership with Walmart.
Klarna will trade under the symbol “KLAR.” While originating in Sweden and maintaining popularity across Europe, executives say that listing in the U.S. signals an intention to focus on American consumers for future growth opportunities.
“It’s the largest consumer market in the world, and it’s the biggest credit card market in the world. It’s a tremendous opportunity, from our perspective,” said CEO and co-founder Sebastian Siemiatkowski.
Siemiatkowski has previously stated that Klarna aims to attract customers away from major credit card companies due to concerns over high-interest charges associated with traditional cards.
Klarna’s main product allows customers to split purchases into four payments over six weeks without interest; longer-term plans include interest charges. The business model appeals especially to those hesitant about using credit cards. Klarna reports having served 111 million consumers worldwide.
The growth of BNPL services like Klarna has drawn attention from regulators and consumer groups concerned about potential financial risks for users who might accumulate debt similarly to how they do with credit cards.
Siemiatkowski addressed these concerns by noting that Klarna closely monitors user behavior: “the average balance of Klarna user is less than $100.” He also highlighted that because loans are short-term—six weeks or less—the company can quickly adjust underwriting standards if needed.
With this IPO, Klarna’s founders have become billionaires: Siemiatkowski’s 7% stake is valued at around $1 billion while Victor Jacobsson holds an 8.4% stake worth roughly $1.3 billion; Jacobsson left the company in 2012. Siemiatkowski did not sell any shares during the IPO process.
Early venture capital backers have also seen significant returns after years of investment; Sequoia Capital owns about 21% of Klarna valued at roughly $3.15 billion, while Silver Lake holds about 4.5%.
Before going public, Klarna reported second-quarter revenue of $823 million and an adjusted profit of $29 million in August. Its delinquency rates are below those typical for credit cards: “pay-in-4” loans have a rate of 0.89%, while longer-term loan delinquencies stand at 2.23%.
Following its debut, Klarna becomes the second-largest BNPL provider by market capitalization behind Affirm—a competitor whose shares have climbed more than 40% this year amid investor expectations that BNPL companies could take market share from banks and traditional credit card providers.
“It’s the largest consumer market in the world, and it’s the biggest credit card market in the world. It’s a tremendous opportunity, from our perspective,” said CEO Sebastian Siemiatkowski ahead of Wednesday’s listing.
