"Klarna," the "European Huabei," made its debut on the US stock market, rising over 40% at one point, with major investor Red Shirt profiting over 3 billion USD

"Klarna Group Plc," known as "European Huabei," made a brilliant debut on the US stock market, with its stock price soaring by double digits, bringing over $3 billion in paper gains to its top investor, Sequoia Capital.

On Wednesday, September 10, Eastern Time, Klarna debuted on the New York Stock Exchange under the ticker symbol KLAR, opening at $52, which was 30% higher than the IPO price. The stock reached a peak of $57.2 during the day, with an increase of 43%, but gradually retraced more than half of its gains, closing at $45.82, up 14.55%.

Klarna's listing was highly sought after in the financial market. Its IPO price was set at $40, significantly exceeding the guidance range of $35 to $37, with a premium of 8.1% to 14.3% over the range. Moreover, Wall Street Journal previously mentioned that Klarna received over 20 times in oversubscription.

Klarna's public offering involved approximately 34.3 million shares, raising about $1.37 billion based on the issue price, which brought the company's valuation to approximately $15.1 billion. Due to the significant rise in stock price at opening, the company's market capitalization further increased, approaching $20 billion.

Before Klarna's listing, media reports indicated that Sequoia, as Klarna's largest investor, had cumulatively invested about $500 million since 2010, and this listing would yield over six times the return on investment. Based on Tuesday's opening price, the value of Sequoia's holdings rose to $3.2 billion.

Klarna's successful listing injects new vitality into the IPO market in the US this year. Prior to Klarna's listing, several popular tech stocks had already appeared, including "the first stablecoin stock" Circle and Figma, the highest-valued software company in the US in three years. Klarna's listing pushed the total fundraising amount for initial public offerings this year to $25.7 billion, approximately 26% higher than the same period last year.

"Buy Now, Pay Later" Giant Transforms into a Full-Service Bank

Founded in 2005 and headquartered in Stockholm, Klarna is known for its "Buy Now, Pay Later" (BNPL) services. CEO Sebastian Siemiatkowski stated that this IPO marks Klarna's transformation from a single BNPL service provider to a comprehensive financial services provider.

The company has expanded into banking products such as savings accounts, checking accounts, and credit cards, and holds a full banking license in the European Union. In the US market, Klarna has partnered with Visa to launch a debit card, becoming Walmart's exclusive BNPL service provider, and offers services on platforms like eBay.

As of June 30 this year, Klarna reported revenue of $1.52 billion and a net loss of $153 million over the past six months. The company operates in 26 countries, with an increase of 26 million active users in the past 12 months. Siemiatkowski emphasized that the company has achieved capital self-sufficiency, and this listing is primarily to regulate stock trading

The Investment Journey Behind Sequoia Capital's Rich Returns

One day before Klarna's IPO, media reports revealed that Sequoia Capital holds 21% of Klarna's voting shares, valued at $3.15 billion based on the IPO price. The investment firm began investing in Klarna in 2010, with a total investment of approximately $500 million, and this IPO will bring about $2.65 billion in paper gains.

Sequoia Capital sold only about 2% of its holdings in this IPO. After the six-month lock-up period expires, Sequoia can choose to sell more shares or continue to hold them. Following the IPO of Figma and the pending sale of Wiz to Google, this marks Sequoia Capital's third major exit project this year.

Klarna's IPO journey also reveals internal divisions within Sequoia.

In early 2024, due to disagreements over amending Klarna's shareholder agreement, then-partner Matthew Miller attempted to remove Michael Moritz, who had drafted the early investment in Klarna, from Klarna's board.

However, due to Moritz's close relationship with Klarna CEO Sebastian Siemiatkowski, it was ultimately Miller who left the board, with his position taken over by Sequoia partner and Moritz's ally Andrew Reed. Moritz currently serves as the board chairman in an independent director capacity.

IPO Boosts Company Prospects and New Stock Surge in U.S. Markets

Klarna's decision to go public comes at a time when the U.S. IPO market is recovering. The company originally planned to go public in April this year but postponed due to market turmoil caused by the Trump administration's tariff policies. With improved market sentiment, Klarna restarted its IPO plans and achieved success.

Klarna's Chief Financial Officer Niclas Neglén stated that the IPO has brought credibility to Klarna, sending a signal to customers and business partners that "we are a truly capable company." The debit card launched by the company has seen 5 million customers queueing in less than two months, demonstrating strong market demand.

Klarna's successful IPO injects confidence into the fintech industry. Its peer Affirm's stock price has risen 132% over the past year, providing a favorable market environment for newly listed fintech companies. This week, companies like cryptocurrency exchange Gemini are also planning to go public, continuing the tech IPO boom this year