In May of this year, Klarna said it was cutting 10pc of its jobs around the world after what its CEO described as a ‘tumultuous year’.
Swedish fintech company Klarna has seen a major cut in its valuation following the closure of its latest funding round of $800m.
The ‘buy now, pay later’ start-up had previously achieved a valuation of almost $46bn in 2021, thanks to a major funding injection from Japan’s Softbank. At the time, it was the biggest buy now, pay later operator in Europe and it was looking to corner the US market. As well as Softbank, its investors included Adit Ventures, Honeycomb Asset Management and WestCap Group.
However, its fortunes have since endured a dramatic downturn. It is now valued at just under $7bn after its latest funding round.
In May of this year, Klarna said it was cutting 10pc of its jobs around the world following what its CEO described as a “tumultuous year”.
He attributed inflation, the volatile stock market and the ongoing war in Ukraine as factors in the fintech’s reversal of fortunes.
The company claimed that its latest financing attracted “strong support” from both existing and new investors. Its new funding will be used to expand Klarna’s market in the US.
Existing investors who returned to support the company included Sequoia, Bestseller, Silver Lake and Commonwealth Bank of Australia. New investors include Mubadala Investment Company and the Canada Pension Plan Investment Board.
Following the closure of the round, Klarna aspires to allow all of its more than 1,000 smaller shareholders to participate on a pro-rata basis in a process that will continue for the coming few weeks.
Sebastian Siemiatkowski, CEO of Klarna, said: “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 recognised our strong position and continued progress in revolutionising the retail banking industry.”
“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,” he added.
Klarna launched its services in Ireland last year. Its first partners here included Gym + Coffee, Perspective, Yummie, Cult Beauty, Greenes Shoes, Luna by Lisa and Yours Clothing.
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