Shares of Swedish buy-now-pay-later company Klarna surged 30% in their much-anticipated public debut on the New York Stock Exchange, opening at $52 compared to the IPO price of $40 set late Tuesday.More than 34 million shares worth about $1.37 billion were sold, making it the largest IPO this year, according to Renaissance Capital. It took specialists on the NYSE floor nearly three-and-a-half hours to manually price the first batch of trades, AP reported.The listing comes in one of the busiest years for IPOs, alongside debuts from Figma and Circle Internet Group. Upcoming offerings include StubHub and Gemini, the crypto exchange majority owned by the Winklevoss twins.Founded in 2005, Klarna entered the US market in 2015 through a partnership with Macy’s. Today, it works with hundreds of thousands of merchants and has struck deals with Walmart and other retailers. Klarna will trade under the ticker “KLAR.”“It’s the largest consumer market in the world, and it’s the biggest credit card market in the world. It’s a tremendous opportunity, from our perspective,” CEO and co-founder Sebastian Siemiatkowski told the Associated Press ahead of the IPO.Klarna’s popular “pay-in-4” plan lets customers split purchases into four instalments over six weeks. The company also offers longer-term loans with interest, attracting over 111 million users worldwide. Regulators, however, have flagged risks of consumers overextending themselves, similar to credit card debt.Siemiatkowski said Klarna actively monitors consumer behaviour and noted the average user balance is under $100. With its short-term lending model, the company said it can quickly adjust underwriting standards if economic conditions shift.The IPO has minted billionaires among Klarna’s founders. At $40 a share, Siemiatkowski’s 7% stake is worth about $1 billion, while co-founder Victor Jacobsson’s 8.4% stake is valued at $1.3 billion. Early investor Sequoia Capital holds 21% of the firm, worth roughly $3.15 billion, while Silver Lake owns 4.5%.Klarna reported second-quarter revenue of $823 million and adjusted profit of $29 million. Loan delinquency rates stand at 0.89% for short-term loans and 2.23% for longer-term loans, both below the average 30-day credit card delinquency rate.With its debut, Klarna becomes the second-largest BNPL company by market cap after Affirm, whose shares have risen over 40% this year to a valuation of $28 billion. Klarna’s IPO was underwritten by JPMorgan Chase and Goldman Sachs.
