According to the Wall Street Journal, Klarna Bank’s valuation is projected to fall below $15 billion as the buy-now, pay-later (BNPL) player pursues a $500 million fundraise.
That entails that the company will no longer be the most valuable fintech in Europe. Klarna bank is mainly known for its BNPL checkout option, allowing users to defer or split payments interest-free.
Last year, the fund raised $639 million led by SoftBank compared to this year which would be evaluated at $30 billion less.
The company allegedly planned to raise $1 billion at a $30 billion value. However, Klarna’s negotiations with the investors are now at a lower scale.
The company is suffering an economic crisis in which investors are less inclined to invest in underperforming enterprises, hence the staff layoffs. Fearing a possible recession, rising inflation, and a shift in customer sentiment, a 10% staff layoff at Klarna was reported last month.
With Apple introducing a launch into BNPL via Apple Pay earlier this month, Klarna is also facing rising industry rivalry, notably from large technological companies.
Spiked by venture capitalists, many financial technology companies have carved out a market stake in BNPL services. Crypto offerings are also being looked into to attract a younger clientele by some companies.