Swedish fintech Klarna is becoming the buy now, pay later partner for Walmart, further evidence that the IPO Klarna filed for last week could jump-start fintech IPOs after a slow winter. 

The BNPL company will become the exclusive installment payment provider to Walmart’s fintech arm, OnePay, according to a Klarna release today.

“This is a game-changer,” Sebastian Siemiatkowski, co-founder and chief executive of Klarna, said in the release. “OnePay choosing Klarna as their exclusive installment loans partner at Walmart in the U.S. is a huge vote of confidence as we pursue our goal of being available everywhere for everything.” 

Klarna filed for an IPO on March 14 with a goal of raising $1 billion from public markets to hit a valuation of $15 billion post its initial public offering offerings, according to the company’s F-1 prospectus filed with the Securities and Exchange Commission. 

The fintech funding market and IPO activity has declined for the past two years in the face of uncertain macroeconomic conditions and tightening monetary policy, Sarah Lamont, senior associate at global fintech venture capital firm F-Prime Capital, told Bank Automation News. 

“There’s such a big, long fintech IPO pipeline, and I think it’s been shy to crack open,” Lamont said. “I think just a few have to take the jump and give other investors and fintechs confidence to do the same.” 

Mature companies such as Klarna, data transfer provider Plaid and payments company Stripe can head to the IPO market this year, opening doors for others to follow, Lamont said. 

Markets can expect a wave of fintech companies going public in 2025, which will help venture capital firms realize  returns on long-term investments, allowing funds to flow to new startups, Nigel Morris, co-founder of Capital One and co-founder and managing partner of VC firm QED Investors, said at Fintech Meetup on March 10. 

“In 2021, there were 61 fintech IPOs,” Morris said. “Since 2021, there’s been a total of 13.” 

“Now we have a cohort of companies that are at scale, they’re profitable, they’re growing fast, that have business models that make sense,” he said, naming Klarna, Circle and eToro among a few that can have a successful IPO. 

Inside Klarna’s IPO 

Klarna has raised $4.19 billion since its inception in 2005 and now has a valuation of $14 billion, according to the company. It operates in 26 markets including the United States, the European Union, the United Kingdom, Australia and Japan. It provides services to Adidas, Apple, Airbnb and Macy’s. 

The Stockholm-based company said in its prospectus that it aims to raise $1 billion through the IPO, without disclosing its average share price. 

In its F-1 prospectus, Klarna reported: 

• Revenue of $2.61 billion in 2024up 24% year over year; 

• Gross merchandise volume of $105 billion, up 15% YoY; and 

• 93 million active customers, and 675,000 merchants, on its platform globally. 

The company has also deployed AI within its organization for tasks like customer service and fighting fraud, according to the company.  

Nearly two-thirds of Klarna’s customer inquiries are directed and resolved by an AI-drive chatbot without human intervention, according to the company’s Feb. 24, 2024, release. The chatbot handles an average of 2.3 million consumer inquiries each month and is doing the job of 700 full-time employees, the company said. 

Klarna has selected Goldman Sachs, JPMorgan and Citibank among others as its advisory banks to go through the IPO, according to its prospectus. 

Regulatory headwinds 

While the company has been growing at breakneck speed, Klarna explained the potential regulatory headwinds it might face in its prospectus. 

As an international company, Klarna must comply with regulations that differ depending the location and they continue to change as the BNPL sector evolves, the company said.  

“If we fail to comply with these regulations or operate without necessary authorizations, we could face regulatory and/or governmental investigations, enforcement actions, fines and other penalties, and the risk of our customer agreements being unenforceable,” the company said in its prospectus. 

In May 2024, the Consumer Financial Protection Bureau asked BNPL companies in the U.S. to provide their customers with refund capabilities and provide billing statements to customers to file disputes. 

In December 2024, Klarna was fined $46 million by Sweden’s Financial Supervisory Authority for violating anti-money laundering rules.