Following an $800 million funding round, Klarna has announced a new valuation of $6.7 billion.

The valuation represents a stark decline of between 80 and 90 per cent compared to its peak of nearly $46 billion in June last year.

The Buy Now, Pay Later (BNPL) provider said that it has not been immune to “significant downdrafts” of FinTech stock in public markets.

The business added that this latest funding occurred during “possibly the worst set of circumstances to afflict stock markets since World War II”, including high inflation, higher gas prices, rising interest rates, fears of a recession, the war in Ukraine, the aftereffects of the first global pandemic since 1918, and supply chain disruption.

Despite its much lower value, the company’s chief executive remained positive about the new investment.

“It’s a testament to the strength of Klarna’s business that, during the steepest drop in global stock markets in over fifty years, investors recognised our strong position and continued progress in revolutionizing the retail banking industry,” said Sebastian Siemiatkowski, chief executive of Klarna. “Now more than ever businesses need a strong consumer base, a superior product, and a sustainable business model.”

In May, Klarna announced it was cutting its workforce by 10 per cent in response to a “volatile economic environment”.

The move came despite the company introducing a worldwide hybrid working policy earlier in the month, after it said the past two years had “proven” that significant growth and success can be achieved with flexible working.

In its latest financial results, Klarna said that although it had experienced strong growth across the business it needed to “consolidate and capitalise” amid the backdrop of the current economic and geopolitical climate.

Share Story: