The stage is set as Klarna, the renowned name in buy-now pay-later services, gears up for its US initial public offering. This move could reignite the stagnating UK fintech market, which has seen a significant slowdown in technology listings. According to experts, Klarna’s listing on the New York Stock Exchange is a beacon for other fintech companies looking for public market opportunities once again.
But why now? Klarna tried to go public in 2021 but faced investor hesitation due to rising interest rates and economic volatility. Originally valued at $45.6 billion, Klarna’s worth plummeted to $6.7 billion in 2022. Now, with projections estimating a valuation of at least $15 billion, Klarna’s IPO, anticipated in early April, is drawing attention as a harbinger of change for the fintech sector.
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James Wootton of Linklaters, a firm that successfully advised Wise on its 2021 London IPO, asserts that a successful high-profile IPO can be a robust strategy for growth and liquidity for fintech firms struggling in the current climate.
The numbers tell a story: Back in 2021, 101 fintech companies raised a staggering $296.86 billion globally through IPOs. Subsequently, from 2022 to 2024, 86 firms managed only $32.76 billion. Klarna’s move raises hopes for another boom.
Tim Levene, CEO of Augmentum, a UK-listed fintech investment fund, mentions that the market views Klarna as a solid benchmark for future fintech IPOs, expecting it to spearhead a series of successful listings.
Prominent Fintechs Eyeing Their Next Moves
Names like Monzo, Starling, Zilch, and Ebury circle the IPO arena. Zilch, a competitor in the buy-now pay-later space, aims for a 2026 float under CEO Philip Belamant’s guidance.
Ebury, part-owned by Banco Santander, is preparing for a London listing as early as June, seeking a valuation of 2 billion pounds.
Even Revolut and Zopa, although non-committal on immediate IPO dates, remain poised for future listings. These companies, possessing strong valuations and liquidity, can choose their opportune moment.
The conversation about the preferred IPO venue is ongoing, with Klarna’s decision to list in the US likely to amplify this debate. The London Stock Exchange continues to reach out to fintech companies such as Zilch as potential venues come to the fore.
In the world of investment and global trade and beyond, eyes will closely watch Klarna as a bellwether for market dynamics and investor confidence in fintech industries.
