Klarna’s upcoming IPO in the U.S. could be the catalyst that reignites the long-dormant market for tech listings, with a ripple effect expected across Europe’s fintech sector. After a four-year hiatus, the Swedish buy-now, pay-later giant has filed for a public offering on the New York Stock Exchange, with an estimated valuation of at least $15 billion. This move comes after a turbulent period, which saw the company’s valuation drop from a peak of $45.6 billion in 2021 to just $6.7 billion in 2022. The announcement marks the latest phase of Klarna’s long-awaited return to the public market, with the IPO expected in April.
A Glimmer Of Hope For The Fintech Sector
Klarna’s U.S. filing could be the spark that reignites fintech IPOs, which have been in a steep decline since the boom of 2021. Back then, fintech companies raised a staggering $296.86 billion through IPOs, according to PitchBook data. Fast-forward to 2022-2024, and the market saw a sharp contraction, with only 86 fintechs raising a mere $32.76 billion.
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But experts are cautiously optimistic. James Wootton, a partner at Linklaters, believes that Klarna’s IPO could prove to be the turning point for fintech companies looking to tap into the public markets. “Any successful IPO of a high-profile business in the sector will be a catalyst for others to revisit IPOs as a strategic growth and liquidity option,” he said.
The Rise Of Challenger Banks And Payments Startups
The anticipation surrounding Klarna’s listing has raised expectations that other fintechs are poised to follow suit. Challenger banks like Monzo and Starling, as well as payment startups such as Zilch and Ebury, are all reportedly weighing up IPO plans. Zilch, which competes directly with Klarna in the buy-now, pay-later space, is eyeing a potential listing in 2026.
Philip Belamant, CEO of Zilch, stated, “The Klarna IPO will be a significant moment for the fintech sector, and we’ll be watching closely. A successful listing could set the stage for greater investor confidence in European fintechs going public.”
Meanwhile, Ebury, a payments company majority-owned by Banco Santander, is reportedly preparing for a London listing as early as June, aiming for a valuation of around £2 billion ($2.6 billion). However, the timing of the listing will depend on broader market conditions.
European Fintechs Weigh Their Options
As the fintech landscape continues to evolve, other notable players, including Revolut and Zopa, are also keeping their IPO options open. While Revolut has publicly acknowledged its intention to list, it has refrained from providing specifics. Zopa, on the other hand, has no firm IPO timeline but remains focused on its eventual public debut when the right market conditions present themselves.
For many of these companies, the ability to wait for better market conditions is an advantage. “A lot of fintech companies have the luxury of being able to choose their time,” said Patrick Evans, head of UK equity capital markets at Citi.
The U.S. Vs. UK Listing Debate
The choice of New York as Klarna’s listing venue has reignited the ongoing debate about whether fast-growing European fintechs should list on their home turf or cross the Atlantic to the U.S. Monzo, for example, has been in discussions about floating either in the U.S. or the UK but has yet to set a clear timeline or destination.
Meanwhile, the London Stock Exchange continues to court fintech companies, including Zilch, to maintain its competitiveness as a listing venue. However, Zilch has yet to make a final decision on where it will list.
With Klarna’s IPO looming, all eyes are on Europe’s fintech sector. If the Swedish giant succeeds in its public debut, it could pave the way for a surge of IPOs, bringing a much-needed boost to the fintech market and reigniting investor confidence in European tech.
