Klarna CEO Sebastian Siemiatkowski has spent 15 years building up the company © Bloomberg

When a start-up IPOs, it is often the culmination of a frantic period of growth.

But, assuming that Klarna pulls the trigger on a stock market listing in the next one or two years, it will be more than 15 years after the Swedish fintech and bank launched.

The “buy now, pay later” company was started by a trio of business school friends in Stockholm in 2005 and sought to bring invoicing — still common among consumers in the Nordics — into the world of digital shopping.

Klarna has since expanded out of the Nordics to Germany, the UK and Australia as well as the US, the most crucial part of its pre-IPO preparations.

Slowly the pieces are falling into place. In the past three months alone, Klarna has raised $650m in fresh capital at a valuation of $11bn; launched a partnership with US department store Macy’s; and, most recently, revamped its board including the addition of Silicon Valley veteran Sir Michael Moritz as chairman.

Sebastian Siemiatkowski, Klarna’s chief executive and one of its co-founders, is still coy about any potential timing. He has said that an IPO is likely in the next couple of years, but that the latest funding round could buy the company more time to stay private.

In any case, Mr Siemiatkowski is clear that growth in the US is the priority. So ferocious has been the pace of its expansion that the fintech — which had been profitable ever since it started — made its first ever annual loss last year.

He also hinted that its move into retail banking in Europe — it was the continent’s first large fintech to get a banking licence in 2017 — could be replicated in the US. He has previously said he wants to become the “Ryanair” of banking, disrupting incumbents worldwide.

There are undoubtedly challenges ahead of an IPO. Klarna says it makes most of its money by charging merchants fees. But it still makes money in some countries by charging customers for late payments, which critics argue fuels irresponsible spending, particularly among young people. The payment deferral programme has become so ubiquitous that “to klarna” has become a verb for some UK shoppers.

Klarna last week said it wanted to be regulated in the UK by the Financial Conduct Authority, and would start to report missed payments to credit reference agencies.

Credit losses in the first nine months of this year jumped by about a third compared with the same period in 2019, a similar rise to that in revenues.

Mr Siemiatkowski has shown previously that he can be far more patient than the typical start-up founder, working hard to get his product right. Potential investors in a Klarna IPO can expect the same, long build-up to any listing.

Quick Fire Q&A

Company name: Kneip

When founded: 1993

Where based: Luxembourg

CEO: Enrique Sacau

What do you sell, and who do you sell it to: We provide fund data management solutions, regulatory reporting and consultancy services to the asset management community.

How did you get started: Founder Bob Kneip launched the company in 1993 as an agency specialising in the production of annual reports for businesses.

Amount of money raised so far: N/A

Valuation at latest fundraising: N/A

Major shareholders: Founder Bob Kneip and management.

There are lots of fintechs out there — what makes you so special: We offer a unique blend of technology, regulatory expertise and a service trusted by asset managers for more than 27 years.

Further fintech fascination

Wirecard fallout: The Financial Times reports that Germany is to probe the head of the audit watchdog after he admitted to buying and selling shares in Wirecard while his own institution was investigating the company’s auditor. Also, documents seen by the FT show that Deutsche Bank and Commerzbank provided funding for Wirecard’s acquisition of a pair of Indian companies referred to in the fraud allegations against the fintech group.

Follow the money: Sweden’s Tink, which runs open banking platforms, has raised €85m in a funding round that gave it a valuation of €680m, says TechCrunch. The company links up 3,400 banks covering 250m people. The latest funding round was backed by Eurazeo Growth, Dawn Capital, PayPal Ventures, ABN Amro Ventures and BNP Paribas’ venture arm.

New frontiers: Sifted reports that the UK fintech sector has launched a new lobby group, Fintech Founders, to ensure that its voice is better heard by the government. The founders fear that the start-ups are losing out to the financial services establishment when it comes to arguing their case in the corridors of power.

Crypto chronicles: US insurer MassMutual has joined the ranks of Bitcoin enthusiasts, reports the Wall Street Journal. The newspaper says that MassMutual bought $100m of the digital currency for its $235bn general investment account. The insurer said it was part of a strategy to take advantage of new opportunities.

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