Swedish BNPL Klarna avoids strike; switches focus to IPO preparations
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Klarna, a Swedish buy now, pay later (BNPL) company, seemingly managed to avoid strike, after managing to reach an agreement with the unions. Now, the company seemingly switched its focus on laying the groundwork for a widely expected initial public offering.
Klarna IPO expected in H1 2024
The company has already started the process for a legal entity restructuring with the goal of setting up the holding company in what was called an important early step on the long road toward an eventual IPO.
However, the IPO might not be as far away as some believe, as reports now speculate that it could happen in the first half of 2024. With that said, Klarna would still prefer to turn to New York, rather than London.
Reports say that the firm could potentially secure an IPO valuation of somewhere between $15 billion and $30 billion, which would more than double the valuation the company has seen during its latest funding round, which took place in 2022. However, at the same time, it would still be significantly lower compared to the firm’s value from2021, which sat at $46 billion
The severe drop in value came as a consequence of a major market disruption, which made the past two years extremely difficult for tech and fintech firms, which includes the BNPL pioneer. Klarna was even forced to lay off a tenth of its workforce in order to cut costs. While the company managed to survive, its valuation still took a heavy blow.
With that said, the company did show signs of recovery since, so the worst may have already passed for Klarna and others. Klarna specifically reported a net profit for Q3 2023 with particularly strong growth in the United States. The BNPL pioneer saw a 46% growth on a year-on-year (YoY) basis when it comes to gross merchandise value.
Klarna manages to avert a strike
As mentioned earlier, Klarna also experienced other problems this year, specifically a threat of strike. According to its executives, the unions were forcing the employees to go on strike as they attempted to negotiate specific terms with the company. Klarna noted at the time that many of the employees were not interested in going on strike themselves.
However, since then, the company managed to dodge a strike, which was originally scheduled to commence today, November 7. According to those familiar with the matter, the mediators have seemingly managed to negotiate a deal, which resulted in Klarna becoming a member of BAO, the Banking institutions’ employer organization.
Klarna’s CEO, Sebastian Siemiatkowski said that the is convinced that Klarna will be able to benefit from this agreement, and also contribute to making the Swedish model stronger from the inside.
