- Key Insights: Buy now, pay later financier Klarna began trading Wednesday on the New York Stock Exchange under the ticker KLAR.
- What's at Stake: Klarna's public offering serves as yet another proof point for the BNPL industry and signals the return of a healthy IPO market.
- Forward Look: Digital banking in the U.S. represents a huge opportunity for the lender, Klarna's Chief Commercial Officer David Sykes told American Banker in an interview.
After a five-month delay, Swedish neobank Klarna is finally a public company in the U.S.
Klarna, which is best known in the U.S. for its buy now, pay later products, began trading on the New York Stock Exchange this morning under the ticker KLAR. Shares were priced at $40 per share, netting the company a $15 billion valuation.
The listing comes five months after Klarna initially sought to go public and cements the return of a healthy IPO market beleaguered most recently by
For Klarna, the IPO is just the next step in its goal to be everywhere Visa is accepted, said Klarna's Chief Commercial Officer David Sykes.
"That is actually the goal in the U.S.," Sykes told American Banker. "On the consumer front, [the goal is] can we put a card in everybody's wallet? On the merchant front, it's Klarna at every checkout."
But Klarna isn't just looking to capture traditional retail transactions; it's looking to capture all transactions, from the five-dollar pay-in-full Uber transaction to the $4,000 AirBnB transaction.
"You can use Klarna on Zoom, on Adobe, on a range of subscription partners," Sykes said. "You can use Klarna on Uber and DoorDash, all the way to eBay." Klarna also has a deal with Nike and partnered with Walmart's fintech unit
Large-scale distribution partnerships with payment services providers such as
"We've added 200,000 merchants in the past 12 months just from Stripe," Sykes said.
Long-term, Klarna is looking to become a digital bank everywhere, Sykes said, noting that Klarna is already a regulated bank in Europe.
"We've been issuing credit cards for years. We've been taking deposits from our customer base for years. So banking is very much in our DNA," Sykes said. "In the U.S., where we've pioneered payments and shopping, adding banking is a really natural extension of that product suite. We think that is the really big opportunity."
Klarna's IPO also serves as yet another proof point that buy now, pay later lending and point of sale financing are here for the longhaul, said Sanjiv Das, co-founder and president of
"BNPL and point-of-sale financing are expanding at double-digit rates annually, well beyond trend status," Das told American Banker, noting that Pagaya has facilitated over $1.4 billion in originations and launched a AAA-rated asset-backed securitization shelf backed by Klarna's point of sale loans.
"Clear evidence of institutional demand for this asset class," Das said.
Purpose-driven purchases, such as travel, entertainment and retail, have seen the highest levels of growth in Pagaya's point of sale portfolio, growing more than 30% per quarter in total purchase amounts. Loans sizes average $800 for travel, $500 for entertainment, and just about $400 for retail transactions.
Klarna's task will be to further differentiate itself from its top competitor,
"BNPL is doing well," Martin said. "Both Affirm and Klarna are benefiting from that, but Klarna has a broader offering. They're not just BNPL. They use BNPL as an on ramp for a broader suite of offerings: regular banking, credit cards, and even a marketing platform."
