Swedish buy now pay later (BNPL) unicorn Klarna is reportedly facing a hefty downround, which would put its valuation at a third of its previous.
It previously reached a $46bn valuation after closing a $639m funding round in June 2021.
The company’s valuation could now drop to $15bn as it looks to raise a minimum of $500m from investors, according to a report from the Wall Street Journal.
This is a significant drop from what was previously reported. In May, Bloomberg claimed Klarna was facing a valuation drop to $30bn.
Another FinTech company going through troubled waters is WealthTech unicorn Wealthsimple. The company announced it has had to cut its team by 12.5% due to volatility in the market.
Klarna recently announced it too is reducing its team, with it cutting 10% of its global workforce. The reason for this, according to Sifted, was market constraints and changes in the market they had not foreseen.
It’s not all doom and gloom for BNPL companies. Several have managed to raise sizable funding rounds this year. Germany-based B2B BNPL platform Mondu scored $43m in its Series A, while Dutch BNPL service provider in3 raked in $85.3m for its Series B.
Italy-based Scalapay secured a $27m Series B extension to increase the round’s total to $524m.
FinTech Global recently spoke to several BNPL providers about the bad publicity these services are getting about debt. They were clear that BNPL services are very much against getting people in debt, with full transparency a major principle for most providers.
Philip Belamant, co-founder and CEO of Zilch said, “Our incentive lies in providing the customer a sustainable credit product, rather than encouraging them to make impulse purchases they may not be able to afford over time.” Read the article here.
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