Klarna’s statement that it had chosen the US for its long-anticipated IPO was brief – but the implications on the London Stock Exchange were massive.
Founded in 2005 to make online shopping easier, the Swedish FinTech has pioneered the buy-now-pay-later (BNPL) space.
Confirmation of a planned stock market flotation surprised no-one but its choice of the US over London to do it is arguably more significant.
The FinTech’s statement read: “Klarna Group Plc today confidentially submitted a draft registration statement on Form F-1 to the Securities and Exchange Commission (the SEC) relating to the proposed initial public offering of its ordinary shares.
“The number of shares to be offered and the price range for the proposed offering have not yet been determined. The initial public offering is expected to take place after the SEC completes its review process, subject to market and other conditions.”
Klarna’s decision to head to the US is another snub for the LSE and comes after British chip designer Arm chose to list on the Nasdaq.
Donald Trump’s second US presidential term has also fuelled speculation that more firms could chose the US for IPOs so the bad news for the LSE might continue.
Dealmaker Barry Nightingale said: “It means London isn’t open to consumer tech solutions still, while there’s far more investor appetite in the US.”
Writing on LinkedIn, analyst and founder of Growth Hub, Seb Johnson, said: “There’s no set price set but rumours have priced it at between $15bn – $20bn, a big drop from its 2021 valuation of $46bn.
“The US was the expected location for its IPO, but nonetheless it’s still disappointing for the European capital markets.
“If it goes well it could also pave the way for other big European FinTechs to list in the US.
“Monzo and Revolut have both been focusing on US expansion which, if successful, could mean US IPOs.”
Dan Johnson, of London-based Equitable Law, said the reason for Klarna’s choice of the US over London was obvious.
“Sadly, the valuation likely to be achieved by Klarna (and any other ‘FinTech’) in New York = will be at a significant premium to London,” he said.
Global FinTech and tech influencer Efi Pylarinou wrote: “Sad for Europe. Let’s see what (crypto exchange) Kraken and (analytics firm) Chainalysis do in 2025.”
Klarna has a significant presence in the UK, with 18 million UK customers and over 31,000 merchants, which raised hopes that it would choose London for its IPO.
THG founder Matt Moulding has led growing criticism of the LSE in recent years.
The outspoken CEO of the Manchester-headquartered eCommerce giant has regularly hit out at the behaviour of hedge funds, media and bank analysts, who he says have created negative coverage against listed companies, including his own.
Moulding said the result is that the LSE is no longer the place where ambitious companies go to raise investment.
Following last year’s sale of Hotel Chocolat to US confectionery giant Mars for £534m, Moulding pointed out that the amount of capital raised on IPOs in London was now lower than Turkey and Romania.
He wrote: “The demise of the LSE has led to over 100 companies having left London versus this time last year. Another 19 companies, each worth over £100m, have also confirmed plans to exit, with almost nobody planning to join.”