Klarna sees its value slashed by 85% in latest round of fundraising

theguardian.com:

Klarna, the “buy now, pay later” fintech darling that was once Europe’s most valuable private tech company, has seen its value slashed by 85% to less than $7bn in its latest round of fundraising.

The company, which has enjoyed stellar growth while also being criticised for potentially leading shoppers into unsustainable debt, announced the valuation after the conclusion of a difficult $800m funding round as investors continue to question the true worth of many tech businesses.

Just over a year ago Klarna, which was founded in Sweden in 2005, hit a peak valuation of $46bn after a $639m funding round led by Japan’s SoftBank.

“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,” said Michael Moritz, chair of Klarna 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, which in May announced its first-ever large-scale job cuts, shedding 10% of its more than 7,000 staff, said that its popularity is continuing to surge and with more than 150 million customers globally, it is bigger than American Express. Klarna has more than 16 million UK customers.

However, it blamed the difficult fundraising for coming amid “possibly the worst set of circumstances to afflict stock markets since World War II”.

“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,” said Sebastian Siemiatkowski, the company’s chief executive. “Now more