Fintech/News/ Klarna faces valuation slash to $15bn as it seeks fresh round of funding That’s a big drop from Klarna's last valuation of $46bn By Amy O'Brien 17 June 2022 Sebastian Siemiatkowski, CEO of Klarna Sebastian Siemiatkowski, CEO of Klarna \Fintech Is it finally European insurtech’s moment in the sun? By Amy O'Brien 14 February 2023 Fintech/News/ Klarna faces valuation slash to $15bn as it seeks fresh round of funding That’s a big drop from Klarna's last valuation of $46bn By Amy O'Brien 17 June 2022 Swedish buy now pay later (BNPL) giant Klarna is attempting to raise at a third of its previous valuation, the Wall Street Journal reported on Friday, as economic conditions begin to bite. This time last year it raised a $639m round at a $46bn valuation led by SoftBank, making it the world’s second most valuable startup. Now, that valuation may shrink to $15bn as Klarna is in talks with investors to raise at least $500m, reports the Journal. Last month the Journal reported that Klarna was in talks with investors about a deal that would value the fintech at $30bn and provide $1bn in fresh capital. Investors clearly didn’t bite. Just three weeks ago, Klarna’s CEO Sebastian Siemiatkowski announced the company was laying off 10% of its global workforce, citing market constraints. He announced the layoffs to all staff in a prerecorded video message and said: “We are strongly influenced by the outside world. When we set our goals for 2022 in the autumn, it was a very different world than the one we have today. “What we are seeing now in the world is not temporary or short-lived, and hence we need to act,” he added. 👉 Read: Klarna’s valuation history: explained As many as 700 people are affected by the layoffs, which signalled that not even the most well-capitalised fintech in the region is immune to an economic downturn. In the same week, Sifted reported that the fintech had quietly announced that pre-tax losses tripled to $250m in the first three months of the year, up from $80m in the same period last year. Buy now pay later startups like Klarna thrive in a low-interest rate environment where it doesn’t cost much to offer credit to consumers for no or very low interest. For the past couple of years this has meant merchant fees and late payment charges brought in enough revenue — but their margins begin to narrow when central banks hike rates. A spokesperson for Klarna told Sifted that the reports were “pure speculation and we do not comment on fundraising nor valuation speculation.” Amy O’Brien is Sifted’s fintech reporter. She authors Sifted’s fintech newsletter and tweets from @Amy_EOBrien. Related Articles Europe’s biggest fintech exec departures in the last year By Amy O'Brien Click here to read more Monzo confirms $4.5bn valuation after closing new $500m round By Isabel Woodford Click here to read more Can Klarna and its rivals survive an economic downturn? By Amy O'Brien Click here to read more How artificial intelligence is changing the game for banks By Maija Palmer Click here to read more Most Read 1 \Healthtech Is Daniel Ek’s new body scanner worth the hype? Sifted tried it out 2 \Venture Capital VC diversity needs to change — and white men need to take responsibility 3 \Venture Capital New €3.75bn European Investment Fund pot to back late-stage VCs 4 \Sustainability Counteract closes £15m fund for carbon removal solutions 5 \Mobility Was the $5bn that VCs plugged into escooters worth it?