Klarna is in the process of establishing a UK holding company as it prepares for a potential initial public offering (IPO). In a separate development, the buy now, pay later (BNPL) leader has forged a collective agreement with its Swedish workers to prevent a strike.
The company is undergoing a legal entity restructuring, which it views as a crucial initial step toward an eventual IPO. According to a report from Sky News, a listing could take place in the first half of next year. However, Klarna may choose not to go public in London and could consider an IPO in New York instead.
Sky News estimates that the company could achieve a valuation between $15 billion and $30 billion in its IPO, significantly higher than its last funding round valuation of $6.7 billion in 2022, but still below the $46 billion valuation it commanded in 2021. This decline in valuation followed a challenging period for Klarna, during which it reduced its workforce by 10% amid a tech market correction.
Despite these obstacles, Klarna has recently shown signs of recovery, reporting a net profit for the third quarter, with strong growth in the US market, which experienced a 46% year-on-year increase in gross merchandise value.
In a separate matter, Klarna has successfully avoided a strike at its Swedish headquarters after the Unionen and Swedish Engineering unions threatened to take action on November 7 if a collective agreement was not reached. Mediators have now brokered a deal that will have Klarna join BAO, the banking institutions’ employer organization, ensuring coverage under the collective agreement between BAO and the unions.
“I am convinced that we will benefit from this agreement and that Klarna can contribute to making the Swedish model stronger from the inside,” stated Klarna CEO Sebastian Siemiatkowski.