The IPO market is buzzing as we enter a busy fall season of high-profile listings. Amid this resurgence, Klarna has moved forward with its much-anticipated U.S. IPO.
After originally filing in March 2025 and then delaying its plans due to global tariff volatility, Klarna is now gearing up for an oversubscribed offering that could raise up to $1.27 billion. The company is offering up 34.3 million shares at between $35 and $37 per share, which would translate to a nearly $14 billion valuation.
Below, we leverage proprietary expert interviews and other insights from the AlphaSense platform to dive into Klarna, its growth prospects, and the competitive dynamics of the buy now, pay later (BNPL) market.
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The Key to BNPL’s Growth Prospects
Klarna is a Swedish payments firm specializing in buy now, pay later (BNPL). Projections sourced from the AlphaSense platform show analysts expect total U.S. buy now, pay later spending to surge more than 20% year over year to nearly $100 billion in 2025.
Experts are bullish about BNPL’s growth prospects and its potential to disrupt the traditional credit card ecosystem. As an early entrant in the BNPL space, Klarna is viewed as a key beneficiary of this disruption.
The beautiful thing about buy now, pay later is that you could approve someone that, traditionally, you’ll probably not be available to get a credit card, but you could approve them here because you might be only approving them for $250 credit line and letting it grow as time went by. That was another advantage for a Klarna, as they could say, “Look, we’re not looking to approve someone for $1,000. We can do $250 and we’re willing to take that risk.
Klarna is at the center of the rapidly growing BNPL market, competing with Affirm, Afterpay, SoFi and others for BNPL market share. Estimates show Klarna replacing Affirm as the U.S. BNPL market leader as soon as 2027. A former Klarna director says 14%-15% year-over-year growth is reasonable to expect from Klarna in the near term.
Klarna’s Global Expansion Strategy
Experts pinpoint Klarna’s global expansion strategy as another key differentiator. The company has expanded its global presence significantly of late and now operates in 26 countries.
I think that’s a distinction, I’d say where Klarna has an edge and it’s not trivial to go from one country to 26. Klarna spent years doing that execution … I was there and Klarna has been really good at executing the opening of new country markets. Most of these other companies they’re at the beginning of that process.
Klarna’s ubiquity across regional markets sets it apart from other BNPL peers that do not operate on the same global scale. This is a key selling point for payment processors like Stripe that work with merchants worldwide and need a BNPL solution to match.
I think [Klarna has] a strong ability to flex their business as they go over time. They’re so large in terms of their volume that they’re able to. They’re just generating so much cash that they’re able to reinvest that cash in different ways to stay ahead of the growth. If I had a dollar to invest into either Affirm or Klarna, I’d put it into Klarna.
The synergies at play are so powerful that Klarna has persuaded companies like Stripe, JPMorgan Payments, Worldpay and Audion to turn on the Klarna platform by default instead of through opt-ins. Experts expect these key strategic partnerships to drive Klarna’s growth in the months and years to come.
Even more recently, Walmart’s OnePay selected Klarna as a BNPL provider for customers shopping in Walmart stores, company filings show. The partnership is expected to go live later in 2025. OnePay will reportedly handle the user experience via its app, while Klarna will make underwriting decisions for loans ranging from three to 36 months in length, and with annual interest rates from 10% to 36%.
Klarna’s AI Advantage
As opposed to Affirm and other peers, Klarna offers technology assets that experts say are more broadly relevant to the fintech use case.
One key example is artificial intelligence. News broke in September 2024 that Klarna had developed its own in-house AI based on OpenAI’s ChatGPT and that it dropped its contract for Salesforce CRM. This news came after CEO Sebastian Siemiatkowski discussed how Klarna’s homegrown ChatGPT-powered customer service bot led to replacing 700 full-time contract employees and savings of approximately $40 million annually.
In the months since, Klarna has continued pouring capital into AI-driven services. On top of its AI-powered chatbot, the company has used AI to improve the customer authentication process and identify customer credit profiles. These advancements are expected to enhance the customer experience and streamline operations, particularly in cross-border transactions.
BNPL Outlook
The macro environment could impact the BNPL space. Thus far, growing adoption of the BNPL model has occurred even against a challenging global macro backdrop. BNPL has yet to be hit by the consumer spending squeeze that has played out in some pockets of retail, experts say.
Surging BNPL adoption has also brought regulatory scrutiny as sovereign governments aim to ensure consumers are protected. This is a particular focus in Europe due to its more stringent regulatory regime. The Dutch government is reportedly trying to curb the rollout of buy now, pay later and has asked Klarna to stop expanding its in-store offerings in the country.
What could all this mean for IPO appetite? While IPO activity remains below its 2021 peak, year-to-date pricings are outpacing 2024 levels, broker research indicates. Fueled by Klarna and other high-profile entries, the IPO market could soon reach its fastest pace of deal activity since 2021. Experts cite the uncertain macro environment as a potential risk to IPO activity.
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