Klarna boss: My three conditions for an IPO – and no, I won’t tell you where
The boss of Klarna has said he has “three tick boxes” for the firm ahead of a public listing, all of which have now been met, as the Swedish fintech looks to revive its plans for a blockbuster IPO as soon as next year.
The Stockholm-based buy-now pay-later firm has been the subject of listing speculation for the past five days after it was revealed to have set up a new UK-based holding company as a precursor to a planned IPO.
However there is no indication yet whether London or New York is in the lead for the float – though both have been touted as possibilities in the past.
A restructuring has been agreed with the firm’s largest shareholders and would essentially simplify its corporate structure ahead of a float.
Speaking with City A.M. yesterday, Siemiatkowski said his conditions for an IPO have now been met after the firm posted a profitable quarter over the summer.
“I’ve always had three tick boxes that I want to have before thinking about a public listing,” Siemiatkowski said.
“One was, I think we should be a global company. And the way the world works, global means US. You have to be established in the US.
“Secondly, you have to have a sustainable business model. A year ago, we were growing heavily in the US, we saw fantastic growth but we were running at a negative gross margin so we were losing money on every transaction.”
Klarna has now “matured” and is making money on every transaction, he added.
“And then the third thing is, which I think Google had amazingly in ’05 when they listed they still had tremendous amount of growth ahead of them,” Simiatkowski told City PM
“I sincerely believe that within a few years, we’ll see the emergence of four or five very significant retail banking slash FinTech players that will disrupt this market. For Klarna, I think we have a chance of being one of those four or five global companies.”
Klarna was among scores of fintech firms to shelve plans for public market debuts last year, as investors soured on high-growth loss-making start-ups in a global tech downturn. However, a number of fintechs are reported to be weighing up plans to revive their IPOs.
British digital bank Monzo is reportedly in talks to raise £300m from investors in the last fundraise before an IPO, while fintech firms Starling and Thought Machine are said to be scoping out bankers ahead of a listing.
All the firms have declined to put a timeline on their plans however,
A spokesperson for the Klarna has said its move to set up a UK holding company does not signal that it will float in the UK, however.
The UK is Klarna’s third largest market after the US and Germany, with the firm taking 1.2bn SEK (£86m) in revenues in Britain in the six months to June.
His comments came as Klarna swung into the black for the first full quarter in four years after rolling out a major cost-cutting programme and slashing the number of borrowers defaulting on their debts.
Bosses booked an operating profit of SEK 130m (£9.63m) in the third quarter, up from a loss of SEK 2bn in the same period last year, in its first full quarter of profitability since 2019.