Klarna's IPO: A Different Path Forward for European Fintech
Swedish fintech giant Klarna is set to make a significant comeback to public markets, with sources confirming the company will restart its U.S. IPO plans in September 2025. But this isn't your typical fintech fairy tale. While peers like Circle, Chime, and eToro rode the wave of market euphoria to spectacular debuts, Klarna is charting a more pragmatic course — one that might just signal the beginning of a new era for European fintech.(Reuters)
The Valuation Reality Check
Klarna is targeting a valuation of between $13 billion and $14 billion, with shares expected to price between $34 and $36, aiming to raise close to $1 billion from the offering. This represents a dramatic reset from the company's ambitious targets just a few years ago. In 2021, at the height of the fintech boom, Klarna commanded a staggering $45.6 billion valuation. Even earlier this year, the company was reportedly seeking over $15 billion.
The journey hasn't been smooth. Klarna paused its IPO plans in April after President Trump's sweeping tariffs rattled global markets, joining a chorus of fintech companies that hit the brakes when market conditions deteriorated.
A Tale of Two Markets: Europe vs. the Hype Machine
What sets Klarna apart from its fintech peers isn't just its European origins — it's the company's approach to sustainable growth. While other fintech IPOs in 2025 have followed a familiar playbook of explosive debuts and momentum-driven valuations, Klarna is taking a different approach.
Circle's spectacular rise saw the stablecoin giant rocket 168% in its debut on the New York Stock Exchange after raising $1.05 billion, with shares currently up 243% from its $31 offer price. Chime's Nasdaq debut was similarly impressive, with shares jumping 37% on the first day after pricing at $27 per share, above its expected range.
eToro's momentum continued this trend, with the trading platform jumping 29% in its Nasdaq debut, following the pattern of strong initial pops that have characterized the 2025 fintech IPO market.
But Klarna's story is different. The Swedish buy-now-pay-later pioneer is approaching public markets with a focus on fundamentals rather than hype. The company reported Q2 revenue growth of 20% year-over-year to $823 million, with adjusted operating profit increasing to $29 million and active customers growing 31% to 111 million.
The European Perspective: Building for the Long Term
This measured approach reflects a broader European fintech philosophy that prioritizes sustainable growth over explosive valuations. As Dr. Stefan Petrikovics observes:
"Its IPO will be a milestone for Europe's fintech scene: proof that resilience matters more than hype, that Europe's innovators can compete globally and that sustainable markets are built on credibility, not inflated expectations. I think Klarna's IPO could mark the beginning of a new chapter for European fintech. Lower valuations are the start of a healthier market dynamic. If Klarna performs well, it might encourage more European scale-ups to take the leap, strengthening our continent's presence on global capital markets."
This sentiment captures something crucial about the current moment in fintech. While U.S. companies have captured headlines with spectacular debuts, European companies like Klarna are focusing on the fundamentals that create lasting value.
The Revolut Factor: London vs. NYSE
Klarna isn't the only European fintech eyeing public markets. Revolut, the London-based super app, is reportedly considering both London and NYSE listings, representing another significant European player preparing for the public markets. The broader 2025 fintech IPO landscape suggests we're witnessing a pivotal moment for European fintech companies to establish their presence on global capital markets.
The Business Behind the Buzz
While market dynamics capture attention, Klarna's core business metrics tell a compelling story. The company facilitates more than $100 billion in general merchandise volume for more than 675,000 merchants including H&M, Walmart and Booking.com — and it's profitable. This profitability, achieved after years of losses, demonstrates the maturity that European investors have been demanding.
Klarna reported a 24% increase in revenue, reaching $2.81 billion in 2024, and a net profit of $21 million — its first profitable year after heavy losses in previous periods. The company has also embraced operational efficiency, reportedly saving $40 million annually through AI-driven automation of customer service operations and reducing its workforce from 5,000 in 2023 to 3,500 by the end of 2024.
Market Timing and Strategic Patience
The summer's improvement in equity markets and robust debuts from new issuers have fueled renewed enthusiasm for U.S. initial public offerings, with the 20 biggest U.S. IPOs this year averaging a first-day share price rise of 36%. However, Klarna's approach suggests a different strategy — one focused on long-term value creation rather than short-term market timing.
This patience may pay dividends. As one analyst noted, "The company isn't losing money anymore, they've achieved a net profit and they've likely benefited from the changing interest rates. Disregarding outside factors, it may be the best time for the company to list."
Looking Ahead: A New Chapter for European Fintech
Klarna's IPO represents more than just another fintech listing. It signals a maturation of the European fintech ecosystem and a different approach to building lasting financial services companies. While the company's valuation may be lower than its 2021 peaks, it reflects a more sustainable foundation for long-term growth.
The success of Klarna's offering could indeed mark the beginning of a new chapter for European fintech — one where credibility, profitability, and sustainable growth matter more than headline-grabbing valuations. In a market that has seen its share of spectacular rises and falls, Klarna's measured approach might just prove to be the template for lasting success in the fintech sector.
Interested in learning more about Klarna's innovative financial solutions? Explore Klarna's platform and services to see how the company is reshaping the future of payments and e-commerce.