▼ Summary
– Klarna successfully launched its IPO on the New York Stock Exchange, raising $1.4 billion primarily for its existing investors rather than the company itself.
– The company sold shares at $40, above its announced range, achieving a $15 billion valuation with shares opening at $52 before settling around $46 mid-day.
– Only 5 million of the 34.3 million shares sold were from Klarna, with the rest sold by existing investors like Sequoia Capital, Silver Lake, and BlackRock, who retained most of their stakes.
– Co-founder CEO Sebastian Siemiatkowski did not sell any shares and controls about 7.5% of the company, while co-founder Victor Jacobsson sold 1.1 million shares but still retains over 8%.
– Sequoia Capital is Klarna’s largest shareholder with nearly 23% ownership, and Michael Moritz, who made the initial investment, remained chairperson even after leaving Sequoia.
After two decades of steady growth, Klarna has successfully launched its initial public offering on the New York Stock Exchange, raising a substantial $1.4 billion. The fintech leader priced its shares at $40, exceeding the previously announced range of $35 to $37, and debuted with a market valuation of $15 billion. Trading opened strong at $52 per share before moderating to around $46 by midday.
Out of the 34.3 million shares sold, only 5 million were newly issued by Klarna itself. The vast majority came from existing investors, including major stakeholders like Sequoia Capital, entities linked to Dutch billionaire Anders Holch Povlsen, Silver Lake, and BlackRock. While these investors partially cashed out, each retained the bulk of their holdings in the company.
This approach mirrors strategies seen in other high-profile listings, such as Figma’s recent IPO. Venture capitalists often note that early backers may contribute shares not because they want to exit at the IPO price, but to help meet market demand. A larger float can attract major institutional investors, leading to a more accurate, and often higher, initial valuation.
Klarna’s co-founder and CEO, Sebastian Siemiatkowski, did not sell any of his personal stake during the offering. His ownership, representing approximately 7.5% of the company, was valued at over $1 billion at the $40 IPO price. Another co-founder, Victor Jacobsson, who left the company in 2012, sold 1.1 million shares but remains a slightly larger shareholder with just over 8%. Niklas Adalberth, the third co-founder, continues to hold nearly 3 million shares.
Sequoia Capital emerged as the biggest winner, controlling close to 23% of Klarna. The firm’s relationship with the company dates back to 2010, when partner Michael Moritz made the initial investment. Moritz continued to serve as Klarna’s chair even after departing Sequoia in 2023. A brief period of tension arose when Sequoia appointed an additional board member, but the situation was resolved earlier this year with Andrew Reed joining the board.
Reflecting on the journey, Siemiatkowski described the moment as “surreal.” He recalled the early days in 2005 when the three founders faced repeated rejection and skepticism while pursuing their vision of simplifying online payments. “Going public in New York is huge,” he stated. “It’s proof that a bunch of stubborn dreamers from Stockholm can take on the world, and win.”
Despite the impressive raise, Klarna’s $1.4 billion IPO does not hold the record for the largest of the year. That distinction remains with CoreWeave, which secured $1.5 billion in a June offering.
(Source: TechCrunch)
