Klarna confirms $800 million increase as valuation drops 85% to $6.7 billion

european financial technology Klarna It confirmed it had raised $800 million in a significant drop in valuation.

Rumors traded For at least the last month, Sweden-based Klarna, better known asBuy now, pay laterThe service provider, was seeking to raise new funds. Initial reports indicated that this valuation would be in the range of $15 billion, which is a sharp decline from its value 45.6 billion dollars valuation exactly a year ago. Then earlier this month, leaks indicated that The valuation could be closer to $6.5 billion – And that, as it happened, is by and large its size.

Klarna confirmed today which is now valued at $6.7 billion on the back of its new investment, which is an 85% decrease from the corresponding figure announced in June 2021.

The round included a large number of existing and new investors, including Sequoia, Silver Lake, Commonwealth Bank of Australia, UAE sovereign fund Mubadala Investment Company and Canada Pension Plan Investment Board (CPP Investments).

positive spin

Eager to put a bit of a spin on the ad, Klarna highlighted the “worst stock slump in 50 years” in its press release, while also trying to paint a nicer picture by showing what its valuation looks like today versus 2018 — and it makes good use of — fintech companies. circulated publicly for comparison. Perhaps it’s no surprise to know that Klarna looks pretty good with its hand-picked dataset.

Klarna rating comparisons since 2018. Image credits: Klarna

The hint here is that while Klarna’s rating may have gone off a cliff when looking at a short-term perspective, it actually wasn’t so bad at the grand scheme of things – the big picture is what really matters, right?

But while many companies have succumbed to some of the “revisionAfter the crazy times that the pandemic is causing, it’s worth looking at Klarna’s ratings from each year between 2018 and 2022 to get a bit more perspective on things. In 2019, Klarna . was worth $5.5 billionFollow by 10.6 billion dollars In 2020 and $31 billion in March 2021before you reach the vortex heights $45.6 billion in just a few months.

So not only is Klarna down its previous rating, it is still significantly lower in its rating in 2020, and only marginally higher than its rating for 2019. But, compared to 2018, things are great.

After all that has been said, there will likely be Something To spin Klarna. Its valuation is a reflection of what investors believe and don’t necessarily Reflecting what customers think, it is far from the only company that has experienced such a rating crash. Almost a year and a half after Big IPOKlarna competitive company It’s also experienced turbulent times, with its shares plummeting over the past year — now also valued at roughly the same amount as Klarna, after its market capitalization peaked last year at around $47 billion.

Sequoia partner Michael Moretz said Klarna’s valuation is “entirely due to investors suddenly voting the opposite way” to the way they previously voted.

“The irony is that Klarna’s business, market position, and popularity with consumers and merchants is stronger than ever since it first invested in Sequoia in 2010,” Moretz said in a press release. “Ultimately, after investors come out of their hiding, shares of Klarna and other top-tier companies will receive the attention they deserve.”