Klarna Makes Waves on Wall Street

It's been a remarkable journey for Klarna, the fintech powerhouse that's finally made its triumphant debut on the New York Stock Exchange. The company raised an impressive $1.4 billion on Wednesday, a significant chunk of which benefited its existing investors.

Initial Surge and Valuation Details

Klarna kicked off its public offering by selling shares at $40, outpacing the expected range of $35 to $37, resulting in a staggering opening valuation of $15 billion. Shares soared, initially hitting $52 before stabilizing around $46 during mid-day trading.

Who’s Cashing Out?

In total, 34.3 million shares were sold, but only a fraction—5 million—were issued by Klarna itself. The bulk of shares were offloaded by leading investors, including the powerhouse Sequoia Capital, Dutch billionaire Anders Holch Povlsen, and financial giants like Silver Lake and BlackRock. Despite these transactions, these investors largely retained their major stakes in the company.

A Strategy to Attract Big Investors

This move closely resembles Figma’s IPO strategy. Many existing investors, wary of selling at the IPO price, often contribute additional shares to meet high demand and appease institutional investors, who typically prefer significant allocations.

No Sale for the CEO

Notably, Klarna’s co-founder and CEO, Sebastian Siemiatkowski, chose not to sell any shares during the IPO. At the selling price of $40, his stake is valued at over $1 billion, while he holds around 7.5% of the company. Co-founder Victor Jacobsson, who departed in 2012, did cash out 1.1 million shares but still retains more than 8%.

Sequoia Capital: The Power Player

Sequoia Capital emerges as the most prominent stakeholder in Klarna, commanding nearly 23% of the company. Michael Moritz, a prominent venture capitalist, provided Klarna's initial funding in 2010 and has remained engaged as chairperson even after leaving Sequoia in 2023. Recent board changes sparked some drama, but were amicably resolved.

A Dream Realized

In a reflective statement, Siemiatkowski described the IPO as a surreal milestone. "When we set out in 2005, it was just a wild idea—three of us determined to change shopping and payment experiences. We faced countless rejections and skepticism, but we persevered." He concluded, "Going public in New York isn't just a milestone; it’s a declaration that a group of relentless dreamers from Stockholm can compete globally—and succeed."