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By Oscar McDonald
Swedish buy-now-pay-later giant Klarna has teed up its second attempt at an IPO, with the eyes of the fintech world set on its New York debut.
The company’s valuation has been on a rollercoaster ride over the past three years, peaking at £33.6bn in July 2021 before plummeting to £4.95bn a year later.
The oversubscribed offering is expected to launch on Wednesday, with the price per ordinary share set at $40, valuing the company at $15bn (£11.1bn).
Philip Atkinson, an analyst at Bridgewater, told City AM the valuation was “beneath experts’ estimations of £18.5bn-£22.15bn” and was viewed by some as a “bargain price.”
Booming fintech market
A strong IPO performance from Klarna could be the catalyst for potential listings from UK-based fintechs, such as Monzo and Starling Bank, both of which are understood to be exploring going public.
Kunal Jhanji, MD and Partner at BCG, told City AM that sentiment has shifted in the previously struggling sector. He noted that “a number of successful IPOs in 2025” show investors are “bullish on Fintech as a sector.”
The success of recent fintech listings, such as stablecoin issuer Circle and cryptocurrency exchange Bullish—which rose 235 per cent and 83 per cent respectively on their first days of trading—highlights a fruitful environment for further IPOs.
A similar success from Klarna could cement this message and act as the deciding factor for fintechs on the verge of listing.
Monzo’s pre-IPO valuation was reported to be around £6-7bn in May, while Starling is rumoured to be targeting a valuation of around £10bn.
Unofficial market predictions on platforms such as IG place Monzo’s valuation closer to £10bn, suggesting bullish market sentiment.
Both firms reportedly remain undecided on whether to list in London or New York, or even consider a listing at all. However, choosing London would likely see both companies immediately enter the FTSE 100.
Such a move would provide a much-needed boost to the London Exchange’s credibility, which has taken a hit in recent years.
The fight for top talent
Despite this “strong pipeline,” the question remains whether the London Stock Exchange can retain these firms, or if they will follow Klarna’s example in choosing a US listing.
Nightmare flotations, such as CAB Payments, have marred the historical relationship between London and fintech listings. Shares in the fintech have fallen 83 per cent since its IPO, as well as Wise, which has announced its intention for a dual listing with the US as its primary base. These examples may act as a warning signal to UK-based Fintech firms.
The CEO of Revolut, Europe’s most valuable fintech unicorn, has stated that it is “not rational” for his firm to list in London due to stamp duty on shares reducing market liquidity, joining several other fintech unicorns who have publicly called for the tax to be scrapped.
Future prospects
It isn’t necessarily ‘game over’ for the London markets, however.
Jhanji also noted that “the UK has a strong pipeline of late-stage fintech companies ready to list.” However, he also stressed the need for the UK to expedite efforts to reform capital markets regulation to “improve the conversion rate for FinTechs and further instill confidence in founders.”
Despite Klarna’s “snub” to a UK listing, industry experts remain supportive of the London exchange’s pull. Leo Labeis, chief executive of REGnosys, told City AM that “while London faces increased competition from New York and other global financial centres, it is too early to conclude that it is losing its appeal.”
Labeis also highlighted how London benefits from “unrivalled access to global investors” and “a thriving fintech and tech ecosystem.”
Treasury and market officials are seeking a host of fintech listings to turn the tide for London, with Chancellor Rachel Reeves and then-City Minister Emma Reynolds courting top industry names, including Monzo and Revolut, in March this year.
Reeves will be hoping that these measures are enough to keep London-based firms in place, amidst a turbulent period for Labour.
The Klarna IPO is set to be a taster for the industry as a whole – a taster that Treasury officials will be hoping doesn’t land London listing candidates on the other side of the Atlantic.