Klarna files for a US IPO as buy now, pay later preps for a surge in holiday spending

Buy now, IPO later… Klarna’s rollin’ its shopping cart to Wall Street. After months of speculation, the Swedish payments company this week filed to go public in the US. FYI: Klarna lets shoppers split purchases into smaller interest-free installments across 550K+ global brands including Nike, Sephora, Macy’s, Ikea, and even Airbnb. If successful, Klarna would join publicly traded BNPL rivals like PayPal and Affirm.

• IOU: Klarna’s valued at $14.6B, up more than 2x since 2022. Still, it’s a huge drop from its 2021 valuation of $45.6B.

• Cha-ching: Klarna said it had swung to a profit of $66M in the first half of the year (after a $45M loss last year) as it saw US growth and leaned into AI to lower costs.

BN-PLosion… Buy now, pay later has become a popular way to pay, last year accounting for $75B in online spending. That’s a 14% jump from 2022. And while electronics are typically the most popular BNPL purchase, as budgets tighten more folks are relying on the service for essentials like TP and groceries. A recent survey found that 40% of BNPL shoppers use the service at least once a month, and over half use it more than they swipe credit cards.

• Full cart: Shares of Minneapolis-based BNPL biz Sezzle are up 3,600% since listing on the Nasdaq last year, fueled by young mid- to low-income customers.