Big news for Klarna this week as it files for an IPO in the wake of an 85% drop in the company’s valuation in 2022. The projected – and much revised – valuation for Klarna is $15bn, which has been fuelled by Klarna’s return to profitability in 2023.
The buy now pay later business is booming in Europe it seems, despite the struggling retail sector. Swedish-based Klarna reported net profits up $21m in 2024 on revenues of $2.8bn.
Klarna originally enjoyed a peak valuation of $45bn back in 2021 but was torpedoed by a downturn in sentiment in the fintech sector and tough macro conditions.
Despite the excitement around the Klarna IPO, investors should still be cautious, as shares in Klarna’s competitors Affirm [NasdaqGS:AFRM] and Block NYSE:SQ have both been dropping, even head of the recent travails in the S&P 500.
Klarna wants to bring the heat in the US BNPL market, but its timing could be wrong, with many forecasters now believing the US is going to topple into recession. But the company has just inked a BNPL deal with Walmart, which is a blow to its established US competitors.
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Stada
German drugs maker Stada had said it would IPO this week, possibly even as early as today, but bankers have now advised against it. Market volatility was seen as simply too high to make this a good week for a listing of this scale.
The company is backed by private equity firms Bain Capital and Cinven. The IPO will be testing investor sentiment in Germany which has been sluggish in the wake of the election, but could be picking up now.
The Stada IPO is being valued at between €10-12 billion, so it’s a hefty one. If it happens, this would be the biggest IPO in Europe since Puig listed in Spain.
Stada is known for its flagship cold medication, called Grippostad as well as its sunscreen Silomat.
As with the Klarna IPO, the listing is coming into a hectic market with the VIX trading steadily north of 20, which is not an ideal environment to get an IPO away. German bookrunners will likely hang fire and wait to see if things quieten down on Wall Street in the second half of the week before deciding how to proceed.
Quantum Base
In the UK Quantum Base said it would be listing on AIM in April. The company, which is a spin out from Lancaster University’s quantum physics department, is aiming for raise of between £3-£5m.
The company’s technology is focused on authentication of products, using a smartphone app. Its Q-ID product uses atomic level unique tags which can be applied during the manufacturing process, to certify the authenticity of products. Buyers can then check this using the app.
The process is designed to increase consumer levels of trust in online and physical channels. Obvious applications include within the fashion and online medicines markets, but there are many more.
The technology is currently impossible to counterfeit and could become compulsory in sensitive areas like toys for example, if governments decide to include the technology as part of routine safety standards.
