Klarna: Unfazed by Trump
There’s nothing like a blockbuster IPO to lift the mood of a market suffering from a large dose of presidential buyer’s remorse, and the Swedish buy-now-pay-later group Klarna’s decision to file for a listing on the New York Stock Exchange is a rare shot in the arm for IPO fanciers.
While many had expected the sector to charge back into form under a business-friendly Trump era, the reality of a “what’s going to come out of his mouth next?” tariff policy has had the opposite effect.
Klarna’s valuation has been on the more volatile side of all over the place in recent years, with a peak of $46bn in 2021 that made it Europe’s numero uno start-up for a while before it crashed to $6.7bn a year later. The IPO is expected to value the company at about $15bn after it announced revenues up 24% to $2.8bn in 2024 and a return to a profit of $21m after the previous year’s loss of $244m.
It now operates in 26 countries, processing about 2.9-million transactions a day for its 93-million active consumers across 675,000 merchants.
The appeal for customers is that they can choose to pay immediately or spread payment over three interest-free instalments, with the benefits of fraud protection, hassle-free returns, delivery tracking and an app that will find the best coupons to attach to purchases. The buy-now-pay-later market is expected to hit $160bn by 2032, with major retailers such as Amazon, Target and Walmart offering their versions of the service.
Northvolt: Battery goes flat
No less a luminary than Mark Twain was on a speaking tour of Europe when he was surprised to discover that his obituary had been published, and he supposedly reassured his adoring public with the good news that “the reports of my death have been greatly exaggerated”. Sadly no such reassurance will be forthcoming from European battery maker Northvolt, which finally nailed down the coffin lid by filing for bankruptcy in Sweden after it had filed for Chapter 11 protection in the US last year.
It was by no means the first company to raise the white flag against Chinese and Korean dominance of the electric vehicle battery sector, but it was certainly one of the best funded, having raised about $15bn in equity, debt and government funding since it was founded in 2016.
It had hoped to raise a further $1bn to keep its factory on the edge of the Arctic Circle running, but even with backers such as Volkswagen, BlackRock and Goldman Sachs the sheer scale of its losses proved to be too much.
One of the difficulties Northvolt faced was the lack of backing it received from Sweden or the EU, in stark contrast to the weight of government subsidies received by Chinese companies such as CATL, now the world’s largest battery maker.
The big question is whether it is a strategic imperative to develop a local battery industry, which will require a vast amount of investment, or whether it is enough to accept defeat and acknowledge that the future of the green transition will be powered by Asia.
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