Swedish BNPL giant Klarna’s valuation jumps again

According to Bloomberg, this suggests a $7.85 billion Klarna valuation, a 17 per cent rise from the $6.7 billion valuation in July last year following an $800 million funding round

Swedish buy-now-pay-later (BNPL) giant Klarna’s volatile valuation has jumped again after major shareholder Creades reportedly increased the value of its stake by $11.3 million.

According to Bloomberg, this suggests a $7.85 billion Klarna valuation, a 17 per cent rise from the $6.7 billion valuation in July last year following an $800 million funding round.

It follows Klarna’s first profitable quarter in four years as reported last month, but the group still has a long way to go if it hopes to regain the $45.6 billion valuation it landed after a 2021 cash injection led by Japan's SoftBank.

Even with the recent upgrade in mind, Klarna is worth just 13 per cent of what it was a couple of years ago.

Klarna’s devaluation took place after large-scale workforce and office space reductions, a shift in customer behaviours, and a broader downturn in tech stocks in the face of inflation and rate hikes.

Unicorn fund Chrysalis warned of a write-down on its Klarna investment in July last year when the hype around the BNPL sector began to pop.

It was just one of a number of write-downs in the space after a wave of investment into BNPL startups.

Australian BNPL provider Afterpay was valued at $29 billion when Twitter founder Jack Dorsey’s Block Inc took it over in February last year.

In spite of a slight respite on Klarna’s valuation, it is still below the $15 billion valuation the group is looking for in its highly anticipated IPO.

Klarna is also facing reputational hurdles.

British customers have been increasingly using BNPL platforms such as Klarna to cover essential purchases during the cost-of-living crisis, but campaigners have warned of mounting debt burdens associated with the payment model.