In a sign of the times, Swedish buy now, pay later giant Klarna is reportedly close to a new funding round that would lower its valuation to $6.5 billion – about 1/7 of what the company was valued in June 2021.
The Wall Street Journal reported today, citing unnamed sources, that Klarna “negotiated to raise approximately $650 million, primarily from existing investors led by Sequoia Capital.” Sequoia chairman Michael Moritz is also chairman of the controversial payment giant.
The deal is still in the works, the Journal reports. But when completed, it will be a major fall from favor for Klarna, who rode high last year when the Raised $639 million in a round led by SoftBank’s Vision Fund 2, which is valued at $45.6 billion.
Klarna has made a big push in the United States, compete with publicly traded Affirm† In early June, Klarna said its “US customer base has grown by more than 65% over the past year, reaching more than 25 million consumers.” The entire BNPL (buy now, pay later) segment has taken a beating lately, yet the massive drop in valuation for Klarna gives new meaning to the phrase ‘down round’.
londonbusinessblog.com has reached out to Klarna for comment.
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