The overall rating of the Klarna payment service has fallen by 85 percent within a year. The company from Sweden raised 800 million US dollars (around 794 million euros) from financiers in its new round of financing. However, Klarna had to accept a valuation of only 6.7 billion US dollars instead of the 45.6 billion US dollars in the last financing round in June 2021. The valuation results from the participation in the company that the lenders get for their investment. In other words, there are now many more Klarna shares for the same money.
Klarna’s founder and boss Sebastian Semiatkowski pointed out on Monday, among other things, that the stock market is currently experiencing the worst downturn in decades and that the economic situation is challenging. He argued that some listed companies also had to accept discounts of 75 to 90 percent. In view of the changed investor mood, Klarna will again focus more on profitability – but recently a global platform with 150 million users has been built.
Klarna started with the idea of smoother payment processing in online retail and gradually expanded the range to include credit cards and bank accounts, among other things. Last year, investors were still extremely confident about the business prospects and the valuation skyrocketed. In March 2021, Klarna had raised $1 billion to an overall valuation of $31 billion, only three months later another $639 million came in added to the already around 50 percent higher rating.
The business prospects of financial services such as Klarna are currently viewed with skepticism in some cases because it is assumed that consumers will be able to reduce their spending in view of high inflation and a weakening economy. (dpa)