Klarna Plans $14B IPO Amid Digital Bank Rebranding

Swedish fintech company Klarna is preparing for its highly anticipated IPO, expected to price at the upper end of its marketing range between $35 and $37 per share, valuing the firm at approximately $14 billion. Despite this valuation being significantly lower than its competitor Affirm Holdings, Klarna has seen strong investor demand, with orders reportedly outpacing available shares by eightfold. Klarna, originally known for its buy now, pay later (BNPL) services, is actively rebranding itself as a digital retail bank, expanding its offerings to include savings accounts, debit cards, and budgeting tools to diversify revenue and appeal to a broader customer base. The company reported solid growth in 2024 with $2.8 billion in revenue, its first full-year profit since 2019, and 111 million users globally, though it still faces scrutiny over whether its pivot to neobank status will be successful. Investors are closely watching the IPO as a test of Klarna's ability to distinguish itself in the competitive digital banking market beyond its BNPL roots. The outcome is also significant for the broader European startup ecosystem, as Klarna is one of the continent's most prominent venture-backed companies going public.