Buy now pay later finance company Klarna has seen its valuation plunge.
The company, used by many interiors retailers to allow shoppers to split sales into three payments, raised £673m in new funding. This valued it at £5.6bn – a fraction of the £38.3bn valuation of last year.
The company, which has faced greater regulatory scrutiny and competition from the likes of Apple and Facebook owner Meta, insisted investors would reverse their views once they ‘emerge from their bunkers.’
‘The shift in Klarna’s valuation is entirely due to investors suddenly voting in the opposite manner to the way they voted for the past few years,’ says Michael Moritz, Klarna chair and a partner at investor Sequoia. ‘Eventually, after investors emerge from their bunkers, the stocks of Klarna and other first-rate companies will receive the attention they deserve.’
Klarna has more than 16 million UK consumer customers.
‘It’s a testament to the strength of Klarna’s business that, during the steepest drop in global stock markets in over 50 years, investors recognised our strong position and continued progress in revolutionising the retail banking industry,’ says Sebastian Siemiatkowski, Klarna chief executive. ‘Now more than ever businesses need a strong consumer base, a superior product, and a sustainable business model.’