Klarna raises $800 million, valuation drops lower
Payment service Klarna has closed 800 million dollars in funding. During the investment round, the company’s valuation dropped even lower with 85 percent. CEO Sebastian Siemiatowski berates ‘the steepest drop in global stock markets in over fifty years’.
Swedish payment service provider Klarna is the leading provider of ‘buy now, pay later’ (BNPL) in Europe. In May, the company already faced a 30 percent valuation drop. Afterwards, Klarna layed off around 10 percent of its staff.
85 percent valuation drop
In a press release, Klarna announced closing 800 million dollars in funding from both existing and new investors. The money will be used to expand the company’s market position in the United States.
Klarna was valued at 6,7 billion dollars.
Post-money, Klarna was valued at 6,7 billion dollars. This is a whopping 85 percent drop compared to its valuation of 45,6 billion dollars last year, when Softbank led a sizable investment round. At the time, Klarna was titled the most valuable European fintech.
‘Steepest drop in stock markets in over 50 years’
“It’s a testament to the strength of Klarna’s business that, during the steepest drop in global stock markets in over fifty years, investors recognized our strong position and continued progress in revolutionizing the retail banking industry,” CEO Sebastian Siemiatkowski of Klarna says.
“It is a testiment to the strength of Klarna’s business.”
In the press release, Klarna points to inflation and rising interest rates as well as supply chain disruption due to the pandemic and ongoing war in Ukraine.
Tech companies in stormy weather
Klarna is not the only company facing market upheaval. Tech companies in general have been seeing lower rates. Klarna seems to have been hit especially hard, though, following its exponential growth in the last few years. According to Klarna, its European markets are making 1 billion dollars in gross profit.
European markets are making 1 billion dollars gross profit.
Klarna’s CEO Siemiatkowsi: “With the recent shift in investor sentiment we also now shift our focus and look forward to returning to a modus operandi of growth and profitability. The foundation for a global leader has been set.”