Klarna, a firm that allows people to buy now and pay later, has initiated a legal entity restructuring to establish a new holding company in the U.K., as a prelude to a potential IPO. However, the spokesperson mentioned that Klarna has no current plans to go public, and that building its new legal body in the U.K. does not necessarily imply that the company will list there. Klarna's most recent financing round valued the company at $6.7 billion, a massive 85% decrease from its previous valuation of almost $46 billion.
Klarna, a Swedish payment provider known for its "buy now, pay later" services, has established a holding company in the U.K. as a precursor to an eventual listing on a stock exchange. This move was agreed to by some of Klarna's biggest shareholders, including Sequoia and Heartland. However, the company has no immediate plans to go public, nor has it decided on where it will list, and setting up its new legal entity in the U.K. does not guarantee a listing there. The restructuring, which has been in the works for over 12 months, does not affect any roles nor its Swedish operations, as Klarna Holding will remain a regulated financial holding company directly supervised by the SFSA and will hold a Swedish banking license. Worth $6.7 billion, the company has raised over $4 billion to date from investors, while onboarding SoftBank during the Covid-19 boom in e-commerce. It has since been driving toward profitability, reporting its first month of profit earlier this year. Klarna also launched an AI image recognition tool that can recognize certain products, and recently reached a deal with workers in Sweden to end plans for a strike. The U.K. had been preparing to enforce tough new regulations on the buy now, pay later industry, with plans to require affordability checks and clearer communication in its advertisement of such services. It is now considering abandoning these rules, though, after Klarna and Block bosses voiced their disapproval with certain aspects, such as a measure that would have exempted Amazon.
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