Klarna’s U.S. IPO: A Strategic Inflection Point for BNPL and Neobanking

The Buy Now, Pay Later (BNPL) sector has emerged as one of the most transformative forces in post-pandemic fintech, reshaping consumer spending habits and challenging traditional credit models. Klarna’s upcoming U.S. initial public offering (IPO), slated for September 2025, represents not just a milestone for the Swedish fintech giant but a pivotal moment for the broader BNPL industry. With a projected valuation of $13–14 billion, Klarna’s entry into public markets will test whether its market leadership, operational efficiency, and strategic diversification can justify its price tag in a sector still grappling with regulatory uncertainty and consumer debt concerns.

Market Positioning: Klarna’s BNPL Dominance and Competitive Edge

Klarna’s U.S. BNPL business is a cornerstone of its global strategy. By 2025, the company has secured 47.2 million U.S. users, a 3.5x increase since 2020, and generated $25.77 billion in payment volume—a 17.2% year-over-year surge [3]. Its U.S. market share, estimated at 26.2% as of June 2025, trails only PayPal’s 27.1% but outpaces Affirm’s 19.3% and Afterpay’s 21.9% [2]. This dominance is underpinned by Klarna’s 34% contribution to its total global gross merchandise value (GMV), reflecting its North American expansion [3].

The company’s competitive advantages extend beyond scale. Strategic partnerships, such as its collaboration with JPMorgan Chase to integrate AI-driven underwriting and customer service tools, have enhanced its operational efficiency [1]. Klarna’s pay-in-4 model, used by 83% of U.S. users, has become a de facto standard in the sector, while its AI-led cost-cutting—reducing full-time-equivalent employees by 24% and eliminating reliance on external SaaS providers—has trimmed expenses from 151% of revenue in 2022 to 109% in H1 2025 [5]. These measures have bolstered gross profit margins (47–49%) compared to Affirm’s 40%, despite Klarna’s slower revenue growth (25.1% vs. Affirm’s 46.6%) [4].

Valuation Realism: A Sobering Comparison with Peers

Klarna’s $13–14 billion IPO valuation, while ambitious, must be contextualized against its peers. Affirm, the largest pure-play BNPL provider, commands a $28.45 billion market cap despite a negative operating margin (-2.71%) and a trailing P/E ratio of 570.81 [3]. Sezzle, by contrast, trades at a more modest 24.5x forward P/E while achieving a 76.4% revenue growth rate in Q2 2025 and a 33.1% operating margin [1]. Klarna’s valuation appears anchored to its superior profitability and GMV ($102.9 billion over four quarters vs. Affirm’s $28.6 billion) but faces skepticism due to its slower growth and recent widening net losses ($53 million in Q2 2025) [4].

The IPO’s price-to-sales ratio of 4–6x sales [2] also lags behind Sezzle’s 6x and Affirm’s 10x multiples, suggesting investors may demand clearer evidence of sustainable margins. Klarna’s focus on expanding beyond BNPL—into instant payments and banking services—could justify a premium, but these ventures remain unproven at scale.

Risks and Regulatory Headwinds

The BNPL sector’s rapid growth has drawn regulatory scrutiny. The Consumer Financial Protection Bureau’s (CFPB) 2024 classification of BNPL lenders as credit card providers under the Truth in Lending Act now requires standardized disclosures and dispute-resolution processes [6]. While Klarna’s AI-driven compliance tools may mitigate some risks, rising delinquency rates (up 21% in 2025) and consumer debt concerns could pressure margins [3].

Moreover, the U.S. BNPL market’s projected CAGR of 16.65% through 2030 [1] depends on continued e-commerce growth and consumer adoption. With 44% of Gen Z and 48% of Millennials using BNPL, demographic tailwinds remain strong—but so do risks of overleveraging.

Strategic Implications for Neobanking and Fintech

Klarna’s IPO is more than a valuation test; it signals the maturation of BNPL as a core component of neobanking. The company’s integration of AI, partnerships with legacy institutions like JPMorgan, and expansion into banking services align with broader fintech trends toward embedded finance and hyper-personalized services. If successful, Klarna’s public market debut could catalyze further consolidation in the BNPL space, as traditional banks and tech giants seek to replicate its two-sided network effects.

Conclusion: A Calculated Bet on BNPL’s Future

Klarna’s U.S. IPO represents a strategic inflection point for the BNPL sector, balancing its operational strengths against valuation skepticism and regulatory risks. While its market leadership and profitability offer a compelling case for a $13–14 billion valuation, investors must weigh these against Affirm’s growth-driven premium and Sezzle’s efficiency-driven multiples. In a post-pandemic landscape where consumer spending is increasingly digitized and fragmented, Klarna’s ability to innovate beyond BNPL—and navigate regulatory headwinds—will determine whether its IPO marks the beginning of a new era or a cautionary tale.

Source:
[1] Klarna Statistics 2025: Revenue, User Base, Partnerships [https://coinlaw.io/klarna-statistics/]
[2] Buy Now Pay Later Statistics (2025): Market Share & Trends [https://capitaloneshopping.com/research/buy-now-pay-later-statistics/]
[3] United States Buy Now Pay Later Market Report 2025 [https://www.businesswire.com/news/home/20250217649569/en/United-States-Buy-Now-Pay-Later-Market-Report-2025-Affirm-Afterpay-and-Klarna-Continue-to-Scale-their-Services-as-New-Entrants-and-Traditional-Financial-Institutions-Compete-for-Market-Share---ResearchAndMarkets.com]
[4] Klarna’s IPO: How Should It Be Valued Compared to Affirm? [https://rohitmittal.substack.com/p/klarna-ipo-how-should-it-be-valued]
[5] Are Klarna’s AI-Led Job Cuts a Model for the Payments Industry? [https://www.fxcintel.com/research/reports/ct-klarna-ai-job-cuts]
[6] Buy Now, Pay Later: Market Impact and Policy [https://www.richmondfed.org/publications/research/economic_brief/2025/eb_25-03]