Klarna to raise new funds at reduced valuation of $6.5 billion
Klarna Bank AB is set to strike a deal to raise new funds worth around $6.5 billion, according to people familiar with the matter, a humiliating raid and testimony from the punitive environment faced by startups.
The Swedish specialist lending and online payments provider is negotiating to raise around $650 million, mostly from existing investors led by Sequoia Capital, the sources said. Michael Moritz, who is the chairman of the famous venture capital firm, holds the same position at Klarna.
The deal has yet to be finalized and could still run into last-minute difficulties, the people said. But if it’s over, that would be a huge discount on the company’s valuation when investors led by an arm of SoftBank Group Corp. 9984,
valued Klarna at $45.6 billion in June 2021.
Klarna’s core offering, known as buy-it-now, pay-later, is integrated into the online checkout pages of popular retailers such as Macy’s M,
and Bed Bath & Beyond BBBY,
Consumers use Klarna to split payments over time for things they order online.
Klarna competes directly with credit card companies, and some investors saw the company as possibly the next PayPal Holdings Inc. PYPL,
or Block Inc. SQ,
companies that grew by stealing business traditionally dominated by banks.
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