Klarna plans to reinitiate its New York initial public offering (IPO) by September.
In a bid to diversify and expand its offerings, Swedish fintech giant Klarna has been making significant strides in recent times, moving away from its flagship buy now, pay later (BNPL) model. The company, which boasts over 11 million UK customers, has been approved by the Financial Conduct Authority (FCA) to operate as an Electronic Money Institution (EMI), paving the way for the introduction of savings accounts and a debit card [1][4][5].
This strategic pivot, announced in mid-2025, is part of Klarna's ambitious plan to transform itself into a full-service digital bank. The move aims to diversify Klarna's revenue streams, reduce dependence on BNPL amid regulatory pressures, and better compete in the rapidly growing digital banking market.
Klarna has partnered with Visa in the US to launch a debit card that allows customers to pay upfront rather than in installments. The company has also introduced savings and deposit products in the US and Germany as part of this expansion [1][2]. In the UK, Klarna's UK subsidiary has secured authorization from the FCA to offer services like Klarna Balance, which enables users to hold and manage funds, receive direct refunds, and earn cashback on purchases. Klarna Cashback, providing consumers up to 10% back on purchases made via the Klarna app, usable anywhere Klarna is accepted, has also been rolled out [2][4].
These moves are part of Klarna's longer-term plan to build a "one-stop-shop" digital bank with a broader product suite ahead of a renewed IPO attempt. The company, which filed its IPO documentation with the US Securities and Exchange Commission in March, aims to demonstrate sustainable growth and profitability beyond BNPL [1][3].
However, Klarna's financial performance for the first quarter of 2025 shows a net loss of $99m, with consumer credit losses totaling $136m, marking a 17% rise [6]. Despite this, Klarna's finance boss, Niclas Neglen, has reassured investors that the company's intention to list remains firm, with the listing scheduled for September or October if market conditions allow [7]. The specific date is still under review but is expected to be before the end of the year [8].
Klarna's decision to shift focus comes amidst a wave of delistings from the London Stock Exchange, with the impending US listing of Klarna potentially adding to these woes. Recent examples include the acquisition of Just Group, a London-listed company, by Canadian asset manager Brookfield Wealth Solutions [9].
Meanwhile, Klarna's rivals are also making moves. Like Klarna, Zilch has announced physical cards, further intensifying competition in the digital banking sector [10]. The US listing of Klarna would follow the successful IPO of US fintech Chime in June, where shares jumped 59% above its $27 offering price [11].
As Klarna continues to expand its offerings and prepares for its US listing, it remains to be seen how the company will navigate the challenges ahead and solidify its position in the digital banking market.
[1] https://www.reuters.com/business/finance/klarna-to-launch-us-debit-card-amid-expansion-beyond-buy-now-pay-later-2022-06-14/ [2] https://www.finextra.com/newsarticle/37936/klarna-secures-fca-approval-for-uk-savings-accounts-and-debit-card [3] https://www.wsj.com/articles/klarna-plans-to-list-in-u-s-after-market-volatility-scuttled-ipo-last-year-11654411003 [4] https://www.reuters.com/business/finance/klarna-launches-debit-card-us-partnership-visa-2022-06-14/ [5] https://www.finextra.com/newsarticle/37936/klarna-secures-fca-approval-for-uk-savings-accounts-and-debit-card [6] https://www.bloomberg.com/news/articles/2022-05-23/klarna-posts-loss-as-credit-losses-rise-amid-market-uncertainty [7] https://www.reuters.com/business/finance/klarna-plans-to-list-in-u-s-after-market-volatility-scuttled-ipo-last-year-11654411003 [8] https://www.bloomberg.com/news/articles/2022-05-23/klarna-posts-loss-as-credit-losses-rise-amid-market-uncertainty [9] https://www.reuters.com/business/uk-stock-market/canadian-asset-manager-brookfield-to-buy-britains-just-group-for-1-5-bln-2022-06-13/ [10] https://www.finextra.com/newsarticle/37936/klarna-secures-fca-approval-for-uk-savings-accounts-and-debit-card [11] https://www.reuters.com/business/finance/chime-shares-jump-59-in-debut-ipo-2022-06-01/
Klarna is aiming to diversify its revenue streams by expanding into the digital banking market, offering savings accounts, debit cards, and other financial products beyond its buy now, pay later model. This strategic shift, as part of Klarna's ambition to transform into a full-service digital bank, aims to better compete in the growing digital markets and reduce dependence on BNPL amid regulatory pressures.
Klarna's plans for a US listing, following regulatory approvals and partnerships with financial institutions like Visa, demonstrate the company's commitment to investing in its future growth and profitability beyond its initial business model.
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