NEW YORK—Klarna, the Swedish fintech company known for its buy-now-pay-later (BNPL) services, which are embedded in retailers' online checkout pages, has canceled its long-awaited initial public offering (IPO). It cited escalating market instability following President Donald Trump’s sweeping tariff announcement earlier this week. Klarna's decision comes amid broader volatility that has chilled the IPO market.
According to filings with the Securities and Exchange Commission, the company had been preparing to launch marketing for its IPO this Monday and was eyeing a valuation north of $15 billion. But as financial markets reeled from the shockwaves of the new trade policy, Klarna and its advisers opted to delay the listing indefinitely, sources familiar with the matter told The Wall Street Journal.
The Trump administration’s executive order, signed Wednesday, imposes reciprocal tariffs on various foreign goods. The announcement triggered a sharp sell-off in equities, with the Dow Jones Industrial Average tumbling 4% and the Nasdaq recording its worst performance since 2020. Market participants say the fallout is far from over.
Klarna’s most recent valuation was $6.7 billion in 2022, but it has since been aiming much higher in its U.S. debut under the ticker symbol "KLAR" on the New York Stock Exchange. The firm’s biggest competitor in the U.S., Affirm, has seen its stock sink 46% year-to-date, including a 15% drop just on Friday, adding further complications to Klarna’s IPO prospects.
Backed by investors including Sequoia Capital, Mubadala Investment, and the Canada Pension Plan Investment Board, Klarna had hoped to capitalize on a market resurgence following Trump’s reelection. But the tariff announcement has shattered those expectations.
In its SEC filing, Klarna explicitly cited global trade policy shifts, including tariffs, as a potential risk to its business model. “A downturn in the general economic environment or a slower pace of economic growth... can lead to decreased consumer spending and adversely affect the financial condition of our merchants,” the filing noted.
The IPO pipeline, which had shown signs of reopening after years of sluggish activity, now appears in jeopardy. Hinge Health, another tech firm with IPO ambitions, is still expected to begin its roadshow later this month—but whether it will stay on course remains to be seen.
