June 24, 2023

How to Buy Klarna Stock

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Interested in buying Klarna stock? You can invest in it before it hits the stock market. Learn more about Klarna's investment opportunities here.

Investing in Klarna can be a wise decision due to its impressive growth, expanding partnerships with major retailers, and large US customer base of 34 million.[1] It also showed growth potential when despite the 85% plunge in valuation in 2022, it raised $800 million.

If you're eager to invest in Klarna, check out these options. Plus, learn if Klarna fits your investment portfolio.

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Can you buy Klarna Stock?

Klarna remains a private company. That means it is not available on the stock market yet.

The company expressed its plan to go public. This is due to a doubling of its funding rounds in 2021. But there is no official announcement yet as to when it will happen.

Like most private companies, Klarna is funded by venture capital and other private companies. Some of them are Softbank, Sequoia Capital, and Silver Lake Partners.

But retail investors have ways to invest, too! Here are some other options to buy Klarna stock.

What is Klarna?
Klarna is a payment solution company. It offers a buy now, pay later option and supports online and in-store shopping. It lets you split payments into 4 payments, paid every two weeks.

How to buy Klarna before the IPO Date

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1. Sign up with Equitybee
2. Search for Klarna
3. Invest by funding employee stock options

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If it's not available yet, users will be notified once it is.

You may also indirectly invest in Klarna. Keep reading to know how.

When is Klarna's stock IPO date?
Klarna's CEO, Sebastian Siemiatkowski, mentioned their plan for Klarna to go public. But there is no official announcement yet as to the date. Analysts say that due to the current market conditions, it is unlikely for Klarna to go public any time soon.

How to Indirectly Invest in Klarna stock

You can consider investing indirectly while waiting for Klarna's IPO.

Indirect investment primarily involves buying shares of the publicly traded investors of the company. For Klarna, these are Softbank Group Corporation and Dragoneer Investment Group.

  1. Dragoneer (NASDAQ: DGNU)
    Dragoneer Investment Group is an investment firm based in California. They invest across countries and industries, mainly focusing on tech companies. Airbnb, Alibaba, Spotify, Uber, and ByteDance are some companies they've backed.

  2. Softbank (OTC: SFTBY)
    SoftBank Group Corp., commonly known as SoftBank, is a multinational conglomerate company based in Japan.

    It is one of the world's largest and most influential technology investment firms. SoftBank operates in various sectors, including telecommunications, technology, investment, and finance.

    Take note that Softbank Group Corp is only available on the Japanese stock exchange. You will need an accredited broker that offers Japanese equities.

Since Klarna's major investors are traded in different stock exchanges, let's see how you can invest in them separately.

How to invest in Dragoneer

You can buy Dragoneer using any brokerage or trading app. There are no special qualifications needed.

  1. Create your account on their website or app.
  2. Fund your account. Note that some platforms require a minimum.
  3. Search for Dragoneer (DGNU)
  4. Enter how many shares or the dollar amount you want to buy.
  5. Place the order.

How to invest in Softbank

Softbank stock is not traded on national exchanges like the NYSE or NASDAQ. You can only purchase its shares using a brokerage or trading app offering OTC trade, such as Charles Schwab and Fidelity. Here's how to start:

  1. Create your account on their website or app.
  2. Fund your account. Note that some platforms require a minimum investment.
  3. Search for Softbank (ticker symbol SFTBY).
  4. Enter the number of shares or the dollar amount you want to buy.
  5. Place the order.

OTC stocks are not available on popular trading platforms like Robinhood and Webull.

Once you have made the purchase, it is important to monitor your investment.

What is the over-the-counter (OTC) market?
The over-the-counter (OTC) market is a decentralized network of dealers who trade securities not listed on major exchanges. It consists of individuals and firms that negotiate directly with each other over the phone or electronically rather than through a centralized exchange.

If you are still trying to convince yourself, here is more information to help you decide if Klarna is worth it.

Why invest in Klarna?

Klarna is regarded as the largest fintech company in Europe.

Many investors are interested in the company because of its consistent growth in revenue and market. Founded in 2005, Klarna operates in 45 markets, with a revenue increase of 20% in 2022.

Klarna showed an increasing influence in the retail industry and its ability to establish strong collaborations with renowned brands. There is also increased profitability resulting from the lessened credit losses. Here are the highlights of their recently released 2022 Annual Report.[2]

  • Increased partnerships
    Notable names like Samsung, Groupon, Booking.com, Instacart, Tractor Supply Company, and Fossil Group joined Klarna.
  • Increased profitability
    Klarna improved credit assessments and reduced unpaid debts by 37%, while sales volume grew by 71% for balanced success. This speaks of the increased profitability of the company.
  • Increased customer base
    As of now, there are 34 million Klarna users in the US.

The downside? Some venture capital firms fear the risks posed by inflation and recession. So, fintech companies, like PayPal and Affirm, showed an 80%-90% decrease in their valuation. There is also growing competition like Apple, which launched its own buy-now-pay-later service.

Here is another important factor to consider. Let's take a closer look at Klarna's valuation.

Who owns Klarna?
Klarna was founded by Sebastian Siemiatkowski, Victor Jacobsson, and Niklas Adalberth in 2005, with headquarters in Stockholm, Sweden.

What is Klarna's valuation?

In 2021, Klarna became the world's second-most valuable private fintech company. Its valuation rose from $31 billion to $45.6 billion in 3 months. But its valuation plunged to $6.7 billion in 2022. The table below shows its valuation from 2019 to 2022.

YearValuation
2019$5.5 billion
2020$10.6 billion
2021Q1: $31 billion
Q2: $45.6 billion
2022$6.7 billion (85% drop)

Softbank, its leading investor, did not participate in the 2022 funding round. But other well-known financing firms supported Klarna, including Sequoia, Bestseller, Silver Lake, and Commonwealth Bank of Australia.

There are also new investors like Mubadala Investment Co. and Canada Pension Plan Investment Board.

If you have second thoughts about Klarna, we still have some suggested investments for you.

Alternatives to Klarna stock

Fintech is expected to have a compound annual growth rate of 20.5%, reaching a value of $699.50 billion by 2030. If you want to expand your portfolio, there are also other valuable fintech companies that you can choose from.

Paylpal and Affirm can be alternative investment options.

  1. PayPal (NASDAQ: PYPL)
    PayPal Holdings, Inc. is a payment processing app that includes buy now, pay later as a payment option. It is a trusted and secure way of online money transfer.

    PayPal has shown profitable growth since 2010, with a 9% year-over-year revenue increase. In its recent trade, PayPal's share price rose to 13%. And according to analysts, this was higher than the expected performance.

  2. Affirm (NASDAQ:AFRM)
    Affirm Holding, Inc is one of the leading loan companies and a top competitor of Klarna.

    In 2021, it was valued at $47 billion due to increased loan applications. But its shares price plunged 80% the next year. Like Klarna, Affirm also faced losses because of inflation and market competition.

Bottom Line

Buying Klarna stock in the stock market is not yet possible. Experts think its IPO will likely take longer due to economic conditions.

If you decide to invest in Klarna, you can buy shares from secondary markets. You can also indirectly support it by buying shares from Klarna's investors.

Remember, investment is risky. It is best to take advice from finance experts to have more accurate and reliable projections for your investment.

References

  1. ^ Reports, Retrieved: 6/27/23
  2. ^ Klarna. Klarna Reports Fourth Quarter Results and 2022 Annual Report, Retrieved on, 05/19/2023

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