Klarna Group plc, a major player in the so-called buy now, pay later market, today filed paperwork for an initial public offering.

Sources told Bloomberg that the Stockholm-based company is seeking to raise at least $1 billion. It’s believed Klarna hopes to achieve a market capitalization of more than $15 billion in the offering. That’s more than double what the company was worth in 2022, but well below the $46 billion valuation it had achieved a year earlier.

Klarna’s buy now, pay later service allows consumers to split purchases into multiple monthly payments. The company doesn’t apply interest to transactions that are completed in up to four installments. For large transactions, Klarna provides the option to spread the purchase price across as many as 36 payments.

The company’s service is accessible through a button in the checkout page of many e-commerce websites. Additionally, Klarna offers an app that consumers can use to make purchases in physical stores. The mobile client also provides cashback features, a price comparison tool and a dashboard for managing payments.

Retailers integrate Klarna into their online stores because it can help boost sales. According to the company, adding its service to an e-commerce website increases the average purchase price by 23% in some cases. Klarna also promises to improve other financial metrics such as the frequency at which customers make repeat purchases.

In today’s IPO filing, the company disclosed that more than 675,000 merchants have adopted its service to date. Those companies use Klarna to process payments for 93 million customers. The platform’s gross merchandise value, the combined dollar value of the transactions it processes, reached $105 billion last year.

Klarna’s revenue climbed 24% in 2024, to $2.81 billion. The company also returned to profitability: It generated $21 million in net income after losing $244 million the year prior. Previously it had generated positive net income between 2005 and 2018.

The timing of the IPO filing could be related to three high-profile partnerships that Klarna has inked over the past few months. Those partnerships’ potential to drive revenue growth might help boost investor interest in the offering.

Last month, Klarna teamed up with JPMorgan Chase & Co. to make its buy now, pay later service available to about 900,000 businesses. Earlier, the company became an Apple Inc. reseller and launched an e-commerce storefront that offers iPhone maker’s products. Klarna also partnered with Google LLC to make buy now, pay later features available in Google Pay.

The company disclosed in its IPO filing that it’s holding discussions about two additional partnerships. The first is a proposed collaboration with a U.S. bank that would make Klarna’s service available to more consumers. Additionally, the company is in talks with a payment network operator about launching a payment card in multiple markets.

Klarna plans to list its shares on the York Stock Exchange under the ticker symbol “KLAR.”

Photo: Klarna