US stock IPOs welcome "two major hot topics": "European Huabei" Klarna and "crypto tycoon" Gemini are both highly sought after
Klarna completed its IPO at a price above the upper limit of the guidance range, raising $1.37 billion and achieving a valuation of $15.1 billion, with over 20 times subscription. Gemini significantly raised its IPO pricing range to $24-26, increasing its target fundraising amount to $433 million. Despite being highly sought after in the market, both companies recorded an expanded loss in the first half of this year, and their future profitability will be the focus of investors' attention
This week, the US IPO market welcomed two hot contenders.
According to the latest reports from Bloomberg citing informed sources, European "buy now, pay later" (BNPL) giant Klarna Group Plc completed its pricing at $40 per share on September 10, raising $1.37 billion. This pricing not only represents an 8% premium over the upper limit of the originally planned pricing range of $35-37 but also received more than 20 times oversubscription.
Meanwhile, US cryptocurrency exchange Gemini has also raised its IPO pricing range significantly from $17-19 to $24-26, increasing its potential fundraising scale to $433 million. According to documents submitted to the US Securities and Exchange Commission (SEC) on Tuesday, the company also secured a $50 million private placement from exchange operator Nasdaq, although this investment is contingent on the final completion of the IPO.
Data shows that, excluding closed-end funds and other financial instruments, the total amount raised from US IPOs this year has reached $24.4 billion, surpassing the $20.4 billion raised in the same period in 2024, indicating a clear trend of market recovery.
Klarna: Strong Comeback After Valuation "Roller Coaster"
This company, known as "Europe's Huabei," has a listing valuation of $15.1 billion, which, although down 67% from the peak of $45.6 billion when SoftBank led the investment in 2021, has rebounded 125% compared to the $6.7 billion valuation during its financing in 2022. Behind this valuation roller coaster is Klarna's strategic transformation towards becoming a digital bank.
Klarna is famous for its "buy now, pay later" (BNPL) service and is working to transform into a global digital bank. The company is expanding its "fair financing" business (large-item installment services), which, although only accounts for 2%, has doubled the number of merchants connected in the past two years. CEO Sebastian Siemiatkowski stated that Klarna is "becoming a global digital bank," building a more complete financial ecosystem through products like debit cards.
Documents show that in this IPO, Klarna plans to sell 5.6 million shares, while existing shareholders, including co-founder Victor Jacobsson and entities related to Sequoia Capital, will sell 28.8 million shares. After the listing, Sequoia Capital is expected to hold about 22% of the voting rights.
Gemini Gains Support from Nasdaq, Retail Investors Also Welcome
Led by billionaires Cameron and Tyler Winklevoss, Gemini has seen market confidence boosted after securing an investment commitment from Nasdaq. The company has raised its offering price range from $17 to $19 per share to $24 to $26. At the upper limit of the new range, its market capitalization will reach $3.1 billion.
Notably, Gemini plans to reserve 10% of the IPO shares for long-term users, management, and friends and family, with another 10% allocated to retail investors participating through platforms like Robinhood, SoFi, and Webull.
Founded in 2014, Gemini has over $18 billion in assets on its platform, offering services such as cryptocurrency trading, USD stablecoins, digital asset custody, and cryptocurrency rewards credit cards
Behind the Market's Enthusiasm, Profitability Remains a Challenge
Despite the enthusiasm for IPOs, the financial conditions of the two companies indicate that their profitability still faces challenges.
According to SEC filings, for the six months ended June 30, Klarna's net loss widened from $38 million in the same period last year to $153 million. The company warned that its expansion of "fair financing" long-term loan products would require setting aside more credit loss reserves, which is expected to negatively impact recent performance.
Gemini's loss situation is even more severe. The filings show that its net loss for the first half of this year reached $282.5 million, far exceeding the $41.4 million loss in the same period last year, while total revenue during the same period fell from $74.3 million to $68.6 million.
Klarna's stock is expected to begin trading on the New York Stock Exchange on Wednesday under the ticker symbol KLAR, led by Goldman Sachs, JP Morgan, and Morgan Stanley. Gemini plans to list on the Nasdaq Global Select Market under the ticker symbol GEMI, led by Goldman Sachs and Citigroup
