Imagine handling 2 million transactions every single day across 45 countries. That’s exactly what Klarna, the Swedish buy-now-pay-later giant, achieves with its 150 million active customers. As the Klarna IPO approaches, investors are closely watching this fintech powerhouse that generated $2.8 billion in revenue in 2024 – a 24% increase from the previous year.
However, Klarna’s journey hasn’t been without drama. In fact, the company’s valuation has been on a roller coaster ride – peaking at $45.6 billion in June 2021 before dropping to $6.7 billion in July 2022. Now, as the Klarna IPO date draws closer to its anticipated April 2025 listing on the NYSE, analysts expect a valuation between $15-20 billion.
Whether you’re a seasoned investor or just starting out, understanding how to invest in this significant IPO could open up exciting opportunities. In this comprehensive guide, we’ll walk you through everything you need to know about buying Klarna shares when they become available under the ticker symbol “KLAR.”
Understanding Klarna Before Investing
Founded in 2005 by three students from the Stockholm School of Economics, Klarna has evolved from a simple payment processor into a global financial technology giant. To make an informed investment decision about the upcoming Klarna IPO, understanding the company’s business model, growth trajectory, and financial health is essential.
What is Klarna and how does it make money?
At its core, Klarna is a financial technology platform that pioneered the “Buy Now, Pay Later” (BNPL) concept. The company allows consumers to purchase items from merchants without using their money or credit cards at checkout, instead offering flexible payment options. Klarna generates revenue through four primary streams:
- Merchant fees – The largest revenue source comes from commissions charged to retailers. Merchants pay between 3.29% and 5.99% of each transaction plus a fixed $0.30 fee.
- Interest on financing – For larger purchases, Klarna offers financing plans of up to 36 months with interest rates reaching 19.99% APR, varying based on the customer’s credit score.
- Late payment fees – Customers who miss payments are charged fees ($7.00 per missed payment and $35.50 for each month behind).
- Klarna Card transactions – The company’s virtual card enables in-store purchases, generating revenue through merchant commissions and late fees.
Notably, Klarna’s zero-interest options (Pay in 30 days and Pay in 4 installments) have helped fuel its popularity as an alternative to traditional credit.
Klarna’s growth journey and market position
Since introducing its BNPL feature in 2016, Klarna has experienced remarkable growth. Currently, the company processes approximately 2.5 million transactions daily and serves 85 million active customers globally. Additionally, Klarna has built partnerships with over 575,000 merchants worldwide, including major brands like H&M, Nike, and Wayfair.
The United States has emerged as Klarna’s largest market with approximately 37 million users. Meanwhile, the company maintains strong market positions in Europe, particularly in Sweden and Germany, where BNPL usage is ten times higher than in global e-commerce payments.
Despite this growth, Klarna’s valuation has fluctuated dramatically – soaring to $45.6 billion in June 2021 before plummeting 85% to $6.7 billion in 2022.
Key financial metrics to know
For potential investors, several financial indicators provide insight into Klarna’s performance:
- Revenue Growth: Klarna generated $2.8 billion in revenue during 2024, representing a 24% year-over-year increase.
- Gross Merchandise Volume (GMV): The company processed $105 billion in transactions in 2024, growing 14% year-over-year.
- Take Rate: Klarna’s take rate (revenue as percentage of GMV) improved from 2.3% in 2022 to 2.7% in 2024, indicating more efficient monetization.
- Profitability: After years of losses, Klarna achieved its first annual profit of $21 million in 2024, though operating losses still totaled $121 million.
- Regional Performance: US revenue grew 39% year-over-year in 2024, making it Klarna’s largest market.
- Credit Losses: A concerning metric is Klarna’s credit losses, which reached $495 million in 2024 (17.6% of revenue).
Furthermore, Klarna is expanding beyond pure BNPL into advertising and data insights. Its advertising revenue reached $180 million in 2024, accounting for 6% of total revenue. Meanwhile, the company is leveraging AI technology to improve efficiency, reducing customer service resolution time from 11 minutes to just 2 minutes.
Pre-IPO Investment Options
For investors eager to gain exposure to Klarna before its official NYSE debut, several pre-IPO investment pathways exist. While Klarna remains a private company without public stock availability, certain options allow early access to potential shareholders.
Accessing pre-IPO shares through secondary marketplaces
As Klarna approaches its IPO, investors can explore specialized platforms that facilitate trading of private company shares. Currently, several secondary marketplaces connect interested buyers with existing Klarna shareholders willing to sell their positions:
Nasdaq Private Market provides a platform for trading private Klarna shares, though the company must approve all transactions. Their Tape D™ database offers access to Klarna’s private market share price data.
EquityZen operates a marketplace connecting accredited investors with Klarna shareholders looking to liquidate portions of their holdings. Since 2013, EquityZen has facilitated private company transactions, bringing together buyers and sellers on their platform.
Forge Global offers secondary market access with their “Forge Price” data derived from private market trading activity. The platform provides additional pricing information collected from various sources.
Hiive currently lists approximately 10 live orders of Klarna stock, allowing investors to either accept asking prices or negotiate directly with sellers who may include employees, venture capitalists, or angel investors.
Requirements for accredited investors
According to SEC regulations, only accredited investors can participate in pre-IPO opportunities. To qualify as an accredited investor, you must meet at least one of these criteria:
- Earn annual income exceeding $200,000 individually or $300,000 jointly for the past two years, with expectations of maintaining similar income
- Possess a net worth exceeding $1 million (excluding primary residence), either individually or jointly with a spouse
- Hold certain professional certifications or credentials in the financial industry
- Serve as an executive officer, director, or general partner of the company issuing unregistered securities
First-time buyers should be prepared for verification processes that may include providing financial statements, tax returns, W-2 forms, salary documentation, and potentially letters from financial professionals.
Alternative investment funds with Klarna exposure
For those unable to access direct pre-IPO shares, alternative investment options exist:
Venture capital funds occasionally offer exposure to pre-IPO companies like Klarna. The Fundrise Innovation Fund represents one such option, although investors cannot select individual companies and Klarna is not currently a holding.
Public companies with Klarna investments provide indirect exposure. Visa partnered with and invested in Klarna in 2017 when it was valued around $2 billion. Likewise, Macy’s invested during a partnership announcement in 2020 when Klarna’s valuation approached $10 billion. SoftBank led a funding round valuing Klarna at over $45.6 billion, though that investment has since declined in value.
Essential considerations before pursuing any pre-IPO investment include understanding the inherent risks and illiquidity of private shares. Unlike public markets, pre-IPO investments typically lack price transparency and easy exit options. Furthermore, private securities are highly speculative—investors should be prepared for potential total loss.
Ultimately, as Klarna’s IPO approaches, retail investors might find waiting for the public offering the most accessible option. The post-IPO market often provides better transparency, liquidity, and sometimes attractive entry points following initial price volatility.
Preparing for the Klarna IPO Date
With Klarna’s IPO filing now official, potential investors need concrete preparation steps before shares become available. Timing, account setup, and budget planning are essential elements for participating in this highly anticipated fintech debut.
Expected timeline for Klarna’s 2025 NYSE debut
On March 14, 2025, Klarna officially filed its IPO prospectus with the U.S. Securities and Exchange Commission (SEC). The Swedish fintech giant plans to list on the New York Stock Exchange under the ticker symbol “KLAR”. Consequently, this represents a major milestone for the Buy Now, Pay Later (BNPL) sector.
Presently, the exact IPO date remains unconfirmed as Klarna must complete the SEC review process. Nevertheless, sources suggest the company is targeting an early Q2 2025 debut—possibly as soon as April. The offering will be led by major underwriters including Goldman Sachs, JPMorgan, and Morgan Stanley.
Regarding valuation, Klarna is expected to seek between $15 billion and $20 billion. This represents a significant improvement from its $6.7 billion valuation in July 2022, yet remains substantially below its peak valuation of $45.6 billion from June 2021.
How to set up a brokerage account
To participate in the Klarna IPO, you’ll need an established brokerage account well before the listing date. Initially, follow these steps:
- Select a suitable broker – Research platforms offering IPO access to retail investors, as not all brokers provide this service
- Complete the registration process – Provide identification, financial information, and funding sources
- Meet eligibility requirements – Some brokers require minimum asset thresholds, specifically between $100,000 and $500,000 in household assets
Furthermore, many brokerages have additional IPO-specific qualifications including investor assessments and minimum trade requirements. Once your account is established, you’ll need to express interest in the IPO by submitting an “indication of interest” (IOI) for a minimum of 100 shares.
Creating your Klarna investment budget
Planning your Klarna investment budget requires careful consideration of several factors. Primarily, determine what percentage of your portfolio you’re willing to allocate to a newly public company.
IPO investments typically involve heightened volatility, especially in the fintech sector. Moreover, market conditions could significantly impact Klarna’s debut performance. The company’s valuation has fluctuated dramatically over recent years, illustrating the importance of setting clear investment parameters.
Financial experts suggest:
- Establishing a maximum share price you’re willing to pay
- Determining if you’ll invest during the IPO or wait for post-listing market stabilization
- Setting aside additional funds for potential post-IPO investments if share prices drop
Most importantly, recognize that participating directly in the IPO may be challenging for average retail investors, as allocations often prioritize institutional investors. Therefore, preparing alternative strategies for purchasing shares on the open market after listing is prudent.
Participating in the Klarna IPO
As Klarna’s public offering approaches, retail investors face the practical challenge of securing shares on day one. With the Swedish fintech giant preparing for its NYSE debut under ticker symbol “KLAR”, understanding the mechanics of IPO participation becomes crucial.
Brokers offering IPO access to retail investors
Not all brokerages provide IPO access, but several major platforms offer this opportunity with varying requirements:
- TradeStation requires just a $500 minimum account balance for IPO access
- E*Trade has no specific balance requirements but may require qualification questionnaires
- Robinhood allows customers to submit “conditional offers to buy” at the IPO price
- Charles Schwab grants access with $100,000 account balance or 36+ trades in your history
- TD Ameritrade requires $250,000 minimum balance or 30 trades in the past year
- Fidelity limits participation to Premium/Private Client groups or those meeting household asset requirements
Essentially, online brokers have made IPO access increasingly attainable for retail investors through partnerships with underwriters and simplified qualification processes.
How to place an IPO order
Once you’ve selected and qualified with an eligible broker, placing a Klarna IPO order typically involves:
- Submitting an “indication of interest” before the IPO date
- Specifying your desired share count (understanding allocations may be limited)
- Setting your maximum price (usually the announced IPO price range)
- Confirming your order once final pricing is established
Unfortunately, even qualified investors may receive fewer shares than requested, as IPOs often assign limited allocations to retail participants. Additionally, be aware that IPO shares often come with lock-up restrictions, typically 90-180 days.
What to expect on listing day
On Klarna’s listing day, anticipate significant price volatility as market forces determine the stock’s true value. The company aims to raise at least $1 billion, potentially valuing Klarna between $15-20 billion[59].
Unlike traditional IPOs, if Klarna opts for a direct listing (which remains possible), there would be no creation of new equity shares. Rather, existing shares would sell directly to the public without underwriter involvement.
Subsequently, expect price fluctuations as institutional investors, retail traders, and algorithms all react to Klarna’s public debut. Given the company’s rollercoaster valuation history, from $45.6 billion to $6.7 billion and now potentially back to $15-20 billion, prepare for an unpredictable first day of trading.
Post-IPO Investment Strategies
Timing your investment in Klarna after its NYSE debut could make a significant difference in your returns. For retail investors unable to secure IPO allocations, the post-IPO phase offers several strategic approaches worth considering.
Conclusion
Klarna stands at a pivotal moment as it prepares for its NYSE debut. Through my analysis, this fintech giant shows promising signs of sustainable growth, especially with its first annual profit in 2024 and expanding presence in the US market.
Smart investors should carefully weigh their entry strategy, whether through pre-IPO channels or waiting for post-listing opportunities. The company’s transformation from a simple BNPL provider into a comprehensive financial platform, backed by AI technology and advertising revenue, suggests significant long-term potential.
Success depends on thorough preparation and strategic timing. Therefore, I recommend establishing your brokerage relationship early, setting clear investment parameters, and closely tracking key metrics like revenue growth, credit losses, and AI implementation results. While Klarna’s valuation has seen dramatic swings, its current trajectory and market position indicate a compelling investment opportunity for those who approach it with careful planning and realistic expectations.
