“Smarter shopping starts here“

Klarna is a leading Swedish fintech company founded in 2005 by Sebastian Siemiatkowski, Niklas Adalberth, and Victor Jacobsson. It specializes in digital payments and Buy Now, Pay Later (BNPL) solutions, offering flexible payment options and financial tools to millions of consumers and merchants worldwide, which has transformed how consumers and retailers manage purchases, strengthening its international presence through strategic partnerships and technological innovation. In September 2025, Klarna made headlines by completing the largest IPO of the year on the New York Stock Exchange, raising approximately $1.37 billion and reaching a market valuation between $15–$19.7 billion.

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Business Model

Klarna’s business model centers on the BNPL service, acting as an intermediary between merchants and consumers. Klarna pays merchants upfront for sales, then collects installment payments from buyers according to flexible options, such as paying in four bi-weekly interest-free installments, within 30 days, or through multi-month financing. Klarna generates its primary revenue from merchant fees, while additional income comes from consumer interest on longer-term financing, fees on late or returned payments, card interchange, and premium consumer services. By increasing merchant conversion rates and average order values, Klarna incentivizes retailers to pay higher transaction fees for its payment infrastructure.

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Scale and Growth

Klarna operates at an impressive global scale, serving over 111 million active users, partnering with more than 790,000 merchants across 26 countries, and processing over 3 million transactions daily as of September 2025. Its annual Gross Merchandise Value (GMV) reached $105.02 billion in 2024, a 14% year-over-year (YoY) increase. Klarna generated $1.52 billion in revenue during the first half of 2025, compared to $2.82 billion in 2024, with August results showing 38% YoY revenue growth in the U.S. market. Between August 2024 and August 2025, 202,000 new merchant partners joined Klarna’s network, supported by integrations such as the global rollout through Stripe. Acquisitions like SOFORT and BillPay, combined with fintech partnerships including OnePay and Nelnet, have accelerated Klarna’s international expansion and deepened user engagement.

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IPO and Future Outlook

Klarna completed its highly anticipated IPO on September 10, 2025, listing on the NYSE under the ticker “KLAR.” The offering raised approximately $1.37 billion, with shares debuting at $52 and closing at $45.82, valuing the company between $15–$19.7 billion. Investor enthusiasm reflected renewed confidence in the BNPL sector despite increased regulatory scrutiny and a recent sector-wide usage decline. Klarna’s leadership cited its expanding U.S. footprint, product innovation, and diversified merchant network positioning the company for continued strong growth.

Looking ahead, Klarna aims to further expand its payment offerings, leverage AI-driven personalization, and deepen partnerships across retail and social commerce platforms. The company is working to strengthen customer loyalty, enhance operating profitability, and diversify recurring revenue despite evolving competitive and regulatory challenges. Klarna’s commitment to sustainability, technology, and global reach suggest it will remain a major force in digital finance and online commerce for years to come.

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Competitive Edge

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The BNPL market exhibits a clear progression from specialized payment solutions toward comprehensive platforms integrating shopping, marketing, and financial services. Klarna leads this transformation among BNPL-first companies, while PayPal and Apple leverage existing ecosystems to incorporate BNPL functionality. Pure-play providers like Affirm and Afterpay are expanding service offerings, though remaining more payment-focused than Klarna. This evolution reflects consumer demand for integrated experiences beyond simple financing options.

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Targeted Impact

Klarna empowers consumers and merchants through seamless payment flexibility, driving higher conversion rates and financial inclusion across global e-commerce.

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What Comes Next?

Klarna’s is continuing its ongoing transition into a full-stack digital financial platform, expanding into banking products, deeper AI integration, and broadening cross-border partnerships to maintain growth and profitability.

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Who will benefit?

Klarna’s global user base—over 111 million consumers—its network of 790,000 merchants, as well as investors and employees.

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Klarna's Timeline

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Bull and Bear Case

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Market Opportunity & Expansion

• BNPL market projected to reach ~$80B by 2033 (≈27% Compound Annual Growth Rate)
• Klarna active consumers: 111M (+31% YoY)
• Merchant partners: 790k (as of Q2 2025)
• GMV up 19% YoY in Q2 2025

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Market Risks & Competitive Threats

• BNPL competition from Affirm, Afterpay, Chase, AmEx
• Merchant fee pressure threatens margins
• Walmart warrants (~15.3M issued; ~$500M valuation) reflect costly partnerships

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Competitive Advantages & Defensibility

• Leader in digital payments
• AI-powered recommendations driving efficiency and personalization
• Major partnerships: Walmart/OnePay, JPMorgan, Uber, Bolt
• Expanding beyond BNPL into broader financial services

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Operational Challenges & Execution Risks

• U.S. growth critical but uncertain; slowdown would weigh heavily on results
• High credit losses and provisions erode profitability
• Merchant fee reductions may constrain long-term margins

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Financial Performance & Unit Economics

• Q2 2025 revenue: $823M (+20% YoY)
• Q2 2025 GMV: $31.2B (+19% YoY)
• Five consecutive quarters of adjusted operating profit

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Financial Sustainability Concerns

• Adjusted operating profits achieved, but net income remains inconsistent
• Long-term profitability depends on margin improvement and credit risk control

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Management Team & Execution Capability

• Demonstrated ability to secure blue-chip partnerships (e.g., Walmart)
• Strong track record in rolling out new products and expanding globally

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Regulatory or Structural Headwinds

• Oversight from CFPB (U.S.) and FCA (U.K.) could raise costs and slow adoption
• “Credit stacking” among BNPL users increases risk in a downturn

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Strategic Positioning & Optionality

• Positioned to evolve into an embedded finance super-app across payments, commerce, and credit
• Growth potential linked to continued U.S. merchant onboarding, regulatory clarity, and healthy credit cycle

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Valuation & Timing Risks

• September 2025 IPO raised ~$1.37B, valuing Klarna at $17–$20B
• Valuation requires sustained high growth and profitability; multiples vulnerable if expansion slows

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Prominent News

Klarna Stock Rises 15% In First Of Three Fintech IPOs Expected This Week, September 10, 2025 - Klarna’s stock jumped 15% on its debut, marking a strong opening for the first of three major fintech IPOs expected this week and signaling robust investor enthusiasm for new listings in the sector. Click here to read more.‍

Fintech Bolt progresses its turnaround by landing Klarna as a partner, June 30, 2025 - Klarna and Bolt revealed a strategic partnership that will make Klarna the featured payment choice across Bolt’s checkout network.  Click here to read more.

Klarna nabs Walmart away from Affirm and boosts its IPO prospects, March 17, 2025 - Klarna has secured an exclusive partnership with Walmart to provide buy now, pay later loans through its OnePay platform. Click here to read more.

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Revenue

The graph below displays the revenue and revenue growth of Klarna from 2019 to 2025.

• Revenue is up 23.51% in 2024 from $2.28 billion in 2023
• Revenue in first half of 2025 came in 45.9% lower versus the previous year’s total of $2.81 billion

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Return on Investment (ROI)

The graph below displays Klarna's ROI over the past 180, 90, and 30 days, computed as of September 08, 2025.

• 180D: ↑ +3.26% since March 13, 2025‍
• 90D: ↑ +5.53% since June 11, 2025‍
• 30D: ↑ +3.88% since August 10, 2025

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Funding Round in USD

• Primary Funding Round: Klarna raised $800 million in Series CR on July 11, 2022, at a $6.7 billion valuation and a share price of $215.30
• Investors: Series CR saw participation from Sequoia, Bestseller, Silver Lake, Commonwealth Bank of Australia, Mubadala Investment Company and Canada Pension Plan Investment Board‍
• Current Implied Valuation: $12.50 billion, according to PM Insights‍
• Change Since Last Primary Round:

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Series CR Valuation

<span class="date">2022-07-11</span>
<span class="value">$6.7B</span>

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Implied Valuation

<span class="date">2025-09-08</span>
<span class="value">$12.50B<span>

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Change Since Last Round

<span class="date">2022-07-11 → 2025-09-08</span>

<span class="value green">86.57%</span>

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Quarterly Bid:Ask Volume Ratio

PM Insights highlights the quarterly bid:ask volume ratio of Klarna where there were at least three institutionally-sized broker contributions within that period. The stacked bar chart below shows the total quarterly bid and ask volumes alongside their relative ratios.

• Highest volume: $1.44 billion in Q1 2022‍
• Lowest volume: $34.95 million in‍ Q1 2025‍
• Largest bid-side activity: 62% of $549.80 million in Q4 2024‍
• Largest ask-side activity: 99.72% of $1.44 billion in Q1 2022

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Quarterly Bid to Ask Spread

The plot below illustrates the quarterly average bid-to-ask spread.

• Highest spread: 14.80% in Q2 2023‍
• Lowest spread: 5.66% in Q2 2022

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Volatility of Composite Price

The volatility of the composite price is calculated based on price movements within a 90-day rolling window ending on each respective date. The graph below illustrates the trend in volatility of composite price for Klarna for a one year period from  September 09, 2024 until September 08, 2025.

• Volatility began at 5.76% at the start of the observed period and gradually increased, peaking at 17.64% in Q1 2025
• It then dropped sharply to 1.55% in Q2 2025
• During Q3 2025, volatility remained relatively low at around 3.43%

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