Swedish fintech giant Klarna has officially filed its F-1 prospectus, marking a pivotal step toward its long-anticipated U.S. IPO. While the company has yet to disclose specifics like share quantities or pricing, reports suggest Klarna aims to raise at least $1 billion at a valuation of around $15 billion. This follows a resurgence in its private market valuation, which recently climbed to $14.6 billion after an investor increased its stake—a sign of growing confidence ahead of the public offering.
The company’s financial turnaround is a key highlight. Klarna reported $2.8 billion in revenue for 2024, up from $2.3 billion the previous year, alongside a net profit of $21 million—a stark reversal from its $244 million loss in 2023. This profitability boost aligns with strategic cost-cutting measures, including a significant reduction in workforce. CEO Sebastian Siemiatkowski attributed much of this efficiency to the adoption of AI-driven solutions, such as an in-house ChatGPT-powered customer service bot that replaced 700 contract workers and saved approximately $40 million annually. As a result, Klarna’s employee count dropped from 5,000 in 2023 to roughly 3,500 by the end of 2024.
Klarna’s journey hasn’t been without turbulence. Once valued at over $45 billion during the 2021 tech boom, its valuation plummeted 85% to $6.5 billion as market conditions shifted. However, its recent pivot to profitability and AI innovation has reignited investor interest. The company has also made headlines for ditching third-party tools like Salesforce CRM in favor of proprietary systems, further streamlining operations.
As Klarna navigates the IPO landscape, its ability to balance growth with sustainable profitability will be critical. With AI at the core of its strategy and a leaner operational model, the fintech firm aims to position itself as a resilient player in the competitive buy-now-pay-later market. The coming weeks will reveal whether Wall Street shares Klarna’s optimism as it prepares for a potential blockbuster debut.
