Klarna looking to go public next year as BNPL comes under scrutiny
Klarna, the Swedish-based buy-now-pay-later (BNPL) startup, has said that it does not plan to go public this year but could go in for an IPO in 2022 as the competition in the BNPL space heats up.
The BNPL space has been growing explosively over the last few months with companies like Klarna receiving massive investments as the investors also realize the potential of this field as the mindset of the users has been changed forever by the pandemic and the users are more risk-averse than they were earlier. So, the users prefer to span out their payments through installments rather than trying to go for single large payments for their purchases. This investor interest has helped Klarna to be valued at over $45 billion.
“We want to challenge traditional banking incumbents, that would apply to everything we do and would include also a listing,” Siemiatkowski said, “It’s more plausible to think that an IPO can happen, but we don’t have any immediate plans and aren’t working on this right now.”
The company has been growing across Europe as it has entered Poland recently with a tie-up with the platform of H&M as the BNPL industry comes under increasing scrutiny. The UK wants to regulate and control the BNPL space which would obviously lead to a tightening of controls, which companies like Klarna wouldn’t want.
The tie-up with H&M would now help users to choose between making one-time payments for their purchases or spread out the amount over several installments. The users would be given this choice at the time of checkout. It is expected that Klarna would begin to offer this BNPL product to other eCommerce and businesses in Poland over the next few months and the company is also expected to grow its team in Warsaw. The company would be eyeing some quick growth through acquisitions and partnerships so that it can capture the BNPL space in Europe before the entry of other major players like Paypal and Apple.
Klarna has, in fact, been on an acquisition spree over the last month or so as it acquired the HERO, Stocard, and APPRL platforms during this period as it focuses on the social commerce industry. Each major entrant into the BNPL space is looking to find their own nice space within the industry so that they don’t step onto others’ toes and get into direct competition with other big players.