Swedish fintech company Klarna raises $ 800 million as valuation plummets 85% in one year
The Swedish payment company Klarna Bank AB said on Monday that it had collected 800 million dollars worth 6.7 billion dollars, a decrease of around 85 percent from the price tag of 46 billion dollars it attracted last year.
The tough attitude of financiers comes in the midst of a fall in investor interest in fast-growing technology companies that have not yet made a profit and are burning through cash reserves.
One of the recipients of the pandemic-driven increased e-commerce, Klarna, which offers “buy now, pay later” (BNPL) services, continued to be Europe’s most valuable startup from $ 5.5 billion in 2019.
However, valuations have fallen this year in a broad sale of the stock market, and several large technology stocks have been affected in recent months. BNPL competitor Affirm Holdings Inc has lost more than 80% of its value this year alone.
Klarna said that competitors were down 80-90% from peak values, and that their own decline since June 2021 was on a par with them.
To curb costs, Klarna said about 10% of its workforce was redundant in May, saying that violent inflation and the war in Ukraine had worsened business sentiment.
Several media reports documented Klarna’s struggle to attract new funds, and the valuation fell steadily as it engaged with investors.
“The change in Klarna’s valuation is entirely due to investors suddenly voting the opposite of the way they did in recent years,” said Michael Moritz, a partner at venture capital firm Sequoia, in a statement.
Sequoia, the company’s founders, Bestseller, Silver Lake and the Commonwealth Bank of Australia were among the existing investors who participated in the round.
Klarna also acquired new investors such as Mubadala Investment Company and Canada Pension Plan Investment Board.
(This story has not been edited by Business Standard employees and is automatically generated from a syndicated feed.)
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