How Klarna’s US IPO is Inspiring European Fintechs to Go Public
The upcoming Klarna IPO could pave the way for fintech floations following a period without new tech listings, Reuters reported. The Sweden-based fintech filed for listing on the New York Stock Exchange earlier this month. The company is popular for its buy-now pay-later products.
Klarna IPO’s Impact on Fintechs
Analysts predict that Klarna’s stock market listing could inspire more fintechs into raising capital from the public to fuel their growth.
“Any successful IPO of a high-profile business in the sector will be a catalyst for others to look again at an IPO as a strategic option for growth and/or liquidity,” Linklaters Partner James Wootton said.
In 2021, about 100 fintechs raised close to $300 billion by listing on stock markets across the world. This amount dropped significantly between 2022 and 2024. Over this period, only 86 fintechs went public, raising just about $32.76 billion. Through the upcoming IPO, Klarna is looking to flip this situation.
“It’s quite clear that the market is looking to Klarna as a bellwether for future fintech IPOs, many of which are in a long pipeline. We hope that Klarna is the first of many to list, which will prove a positive data point for the rest of the market,” Augmentum CEO Tim Levene said.
Greater Investor Confidence
European fintechs believe that the success of Klarna’s IPO filing would boost investor confidence in tech startups from the region.
Philip Belamant, CEO of Zilch said, “The Klarna IPO will be a significant moment for the fintech sector, and we’ll be watching closely, it could set the stage for greater investor confidence in European fintechs going public.”
Belamant says his fintech firm is preparing to launch its IPO in 2026. Zilch, which offers a pay-later product that is very similar to Klarna, declared its initial profit in September 2024.
Several other European fintechs plan to go public in the coming months or years. They include Zopa, Ebury, Monzo, and Starling. Spanish payments fintech Ebury is getting ready to list at the London Stock Exchange in June this year, depending on market conditions.
Sources close to the company say the fintech company is seeking to raise public capital at a $2.6 billion valuation.
London-based fintech startup Zopa confirmed plans to launch an IPO but has not firmed up on the timelines yet.
“We continue to plan towards an eventual IPO, preferably in the UK and can be ready in a short time, however we will wait for the right macroeconomic and market conditions,” Zopa Spokesperson said.
Another company that has previously shown indications of going public is UK-based most valued fintech giant Revolut. However, a spokesperson for the fintech startup declined to confirm these plans.
“Our focus is not on if or when we IPO, but on continuing to expand the business, building new products, and providing better and cheaper services to serve our growing global customer base,” the Revolut Spokesperson said.
The Location Factor
Klarna’s decision to list in the US is likely to fuel discussions over where fast-growth fintechs should list. Monzo has been discussing listing in the UK and the US. The startup hasn’t settled on a solid timeline or the location yet. UK’s London Stock Exchange has been making introductory movembers to fintechs like Zilch.
The fintech company has not decided where to list. This is the second time Klarna has attempted to go public in four years. The fintech’s first attempt was in 2021 after its valuation rose from $5.5 billion to $45.6 billion after completing three funding roundings.
However, investors became cautious over investing in tech firms due to stuttering economies and rising interest rates. In a 2022 funding round, the fintech firm reduced its valuation to $6.7 billion. Klarna’s valuation before the IPO is about $15 billion.
