By Oscar McDonald
Swedish buy-now-pay-later behemoth Klarna has prepared its second bid for an IPO, with fintech industry observers focused on its New York stock market launch.
The firm's valuation has experienced dramatic fluctuations over the last three years, reaching a zenith of £33.6bn in July 2021 before crashing to £4.95bn twelve months later, as reported by .
The oversubscribed flotation is anticipated to commence on Wednesday, with ordinary shares priced at $40, placing the company's worth at $15bn (£11.1bn).
Philip Atkinson, an analyst at Bridgewater, informed City AM the valuation sat "beneath experts' estimations of £18.5bn-£22.15bn" and was regarded by some as a "bargain price."
Thriving fintech sector
A robust IPO showing from Klarna could serve as the trigger for potential flotations from º£½ÇÊÓƵ-based fintechs such as Monzo and Starling Bank, both of which are believed to be considering public offerings.
Kunal Jhanji, MD and Partner at BCG, informed City AM that market sentiment has transformed in the previously troubled sector.
He observed that "a number of successful IPOs in 2025" demonstrate investors are "bullish on Fintech as a sector."
The triumph of recent fintech debuts, including stablecoin provider Circle and cryptocurrency platform Bullish—which surged 235 per cent and 83 per cent respectively on their opening trading days—underscores a fertile landscape for additional IPOs.
A comparable achievement from Klarna could reinforce this narrative and serve as the determining element for fintechs contemplating flotation. Monzo's pre-IPO valuation was estimated to be in the region of £6-7bn in May, while Starling is rumoured to be aiming for a valuation around £10bn.
Unofficial market forecasts on platforms such as IG suggest Monzo's valuation could be closer to £10bn, indicating a bullish market sentiment.
Both companies are reportedly still weighing up whether to list in London or New York, or even if they will list at all, but choosing London would likely see them immediately join the FTSE100. Such a decision would provide a much-needed lift to the credibility of the London Exchange, which has suffered in recent years.
The battle for top talent
Despite this "strong pipeline," the question remains whether the London Stock Exchange can retain these firms, or if they will follow Klarna's lead and opt for a US listing.
The historical relationship between London and fintech listings has been marred by disastrous flotations like CAB Payments, whose share price has plummeted 83 per cent since its IPO, as well as Wise, who have announced their intention for a dual listing with the US as its primary base. These examples may serve as a cautionary tale for º£½ÇÊÓƵ-based Fintech firms.
The CEO of Revolut, Europe's most valuable fintech unicorn, has stated that it is "not rational" for his firm to list in London due to stamp duty on shares reducing market liquidity, joining several other fintech unicorns who have publicly called for the tax to be abolished.
Future prospects
The London markets are not necessarily facing a 'game over' scenario.
Jhanji pointed out that "the º£½ÇÊÓƵ has a strong pipeline of late-stage fintech companies ready to list."
However, he emphasised the urgency for the º£½ÇÊÓƵ to hasten its efforts in reforming capital markets regulation to "improve the conversion rate for FinTechs and further instill confidence in founders."
Despite Klarna's decision to bypass a º£½ÇÊÓƵ listing, industry experts continue to back the allure of the London exchange. Leo Labeis, chief executive of REGnosys, told City AM: "while London faces increased competition from New York and other global financial centres, it is too early to conclude that it is losing its appeal."
Labeis also underscored how London enjoys "unrivalled access to global investors" and "a thriving fintech and tech ecosystem."
Treasury and market officials are on the hunt for a series of fintech listings to shift the momentum in favour of London, with Chancellor Rachel Reeves and then-City Minister Emma Reynolds wooing top industry names including Monzo and Revolut in March this year.
Reeves will be hoping that these measures will suffice to retain London-based firms during a volatile period for Labour.
The Klarna IPO is poised to serve as a litmus test for the industry at large – a test Treasury officials will be hoping doesn't send London listing candidates across the pond.
