Klarna said the latest round of funding valued it at $6.7 billion, 85% less than a year earlier, as investor interest in fast-growing tech ventures that have yet to turn a profit falls dramatically.
The market sell-off was widespread and Klarna’s peers had also seen their valuations drop by 80 to 90%, the Swedish group said.
“Klarna has not been immune to the significant downdrafts of fintech stock in public markets,” it said.
The $800 million raised in fresh funding will “primarily be used to expand Klarna’s leading market position in the United States,” it said.
Klarna blamed its falling valuation on “the worst set of circumstances to afflict stock markets since World War II,” pointing to high inflation, rising interest rates, lingering effects of the pandemic, supply chains disruptions and “the dislocations caused by the war in Ukraine.”
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The company had already seen the worsening economic situation impact its business and in late May, Klarna announced it was cutting its 7,000-strong workforce by around 10%.
Launched in 2005, Klarna has established itself as one of Sweden’s most successful startups, offering businesses online payment solutions and consumers easy payment options.
According to Klarna, it has 147 million active consumers across more than 400,000 merchants in 45 countries.
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