Buy Now, Pay Later (BNPL) provider Klarna is looking for fresh funding to keep up with regulatory capital requirements, according to reporting by the Wallstreet Journal (WSJ).

In the past two years, the Buy Now, Pay Later (BNPL) provider’s valuation rose from $5.5 billion to $46 billion.

WSJ states that this has changed, and that the startup has burned through a chunk of the money it raised in recent years and is now seeking fresh funds.

Part of the reason it needs more capital is to keep up with more stringent Swedish bank capital requirements, people familiar with the company told the WSJ.

Fundraising negotiations are said to be continuing. Klarna’s valuation fell to around $30 billion in May, and then to around $15 billion.

Those familiar with the company have said the BNPL provider’s value might dip as low as $10 billion, and that this is something Klarna is resisting.

Last month, 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 May, 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.

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