Swedish payments firm Klarna Bank AB is approaching a deal to raise new capital at a valuation of about $6 billion from existing investors led by Sequoia Capital, as indicated by an individual acquainted with the matter.
The financing round is yet to be concluded, yet if effectively finished would represent a stunning decrease in the valuation of a once high-flying, buy-now-pay-later (BNPL) venture that at one point was Europe’s most valuable startup.
Last year, Klarna raised more than $600 million from a group of investors led by SoftBank’s Vision Fund II in a funding round that bestowed it a valuation of $46 billion — more than several of the region’s major banks.
In an emailed statement Klarna said, “As always, we do not comment on fundraising nor valuation speculation.”
Klarna’s current fundraising woes come amid a sharp drop-off in investor interest for fast-growing tech ventures that have yet to turn a profit and are burning tens of millions of dollars in cash.
The Wall Street Journal reported Klarna’s latest fundraising talks earlier on Friday.
Valuations have tumbled, and several major tech stocks have been battered in recent months. Major BNPL players and Klarna competitors like Affirm Holdings Inc have shed more than 80% of their value this year alone.
In May, Klarna Chief Executive Sebastian Siemiatkowski told Reuters in an interview that the firm was in talks with investors to raise more money and had no plans to go public this year.
Klarna, one of the world’s most high-profile tech startups, was widely expected to go public this year, but the market for initial public offerings has collapsed dramatically after a record-breaking 2021 due to market volatility following Russian’s invasion of Ukraine and a broader sell-off in tech stocks.