Klarna postpones US IPO as Trump's tariffs rattle markets
Buy-now-pay-later lender Klarna has postponed its US initial public offering owing to the market turbulence. It is not alone, says Matthew Partridge


Online payments provider and buy-now-pay-later (BNPL) lender Klarna has become “the latest... casualty” in the initial public offering (IPO) market following the announcement on tariffs, say Ben Dummett and Joe Wallace in The Wall Street Journal. It has decided to postpone its flotation. It was due to launch a marketing campaign for the listing on the New York Stock Exchange, where it has been targeting a valuation of $15 billion – over double the $6.7 billion it was worth in 2022. Rival Affirm’s market valuation dropped 15% on Friday 4 April. It has almost halved to $12 billion this year.
The dismal performance of Affirm and its other rivals may have played a big role in Klarna having “second thoughts” about entering the stock market, says Pymnts. However, there are also some “larger concerns”. The trade war unleashed by Donald Trump could cause consumers to “throttle” overall spending. This would be particularly bad news for Klarna, which makes its money from short-term loans to consumers. What’s more, during bear markets, investors tend to focus on companies with a “prolonged history of operating profits”, while Klarna admitted in recent pre-flotation filings that operating losses had instead “been widening at the company”.
Is Klarna a prudent lender?
The evidence suggests that Klarna’s ability to make loans wisely isn’t as great as it might seem, adds Stephen Gandel for Breakingviews. While its headline loan-loss rate is only 0.47%, far lower than the 5.2% banks have been forced to write off on credit-card loans, it has set aside $495 million to cover potential unpaid debt from consumers. Using an alternative measure, Klarna’s loan losses are actually “slightly worse” than the industry average at 5.5% of outstanding balances. While Klarna’s customers do pay off their instalment loans more quickly, it is not clear that Klarna’s business model is really different from that of banks, so investors could be forgiven for giving it a “more bank-like valuation” rather than treating it like “a high-growth company”.
Sweden’s Klarna is the “new kid on the block” when it comes to BNPL in the US, says Theodora Lee Joseph in Finimize. This can be positive: the US market is much less developed than the European one, with a mere 9.8% of consumers using BNPL, compared with 20% in the UK and 33% in Germany. But competition in America is more intense, with Affirm and PayPal “vying for market share” too. Many US firms offer BNPL “as a free add-on”, which is another challenge. Klarna “might have to sacrifice margin to stay competitive”.
Still, Klarna isn’t the only company that has decided to delay a US listing for now, says the Financial Times. Ticketing company StubHub, virtual physical-therapy company Hinge Health and Israel-based trading platform eToro have, too. This marks a “stark turnaround” from expectations at the start of the year that the IPO market “would boom under an ostensibly pro-business Republican administration”.
This article was first published in MoneyWeek's magazine. Enjoy exclusive early access to news, opinion and analysis from our team of financial experts with a MoneyWeek subscription.
Get the latest financial news, insights and expert analysis from our award-winning MoneyWeek team, to help you understand what really matters when it comes to your finances.

Matthew graduated from the University of Durham in 2004; he then gained an MSc, followed by a PhD at the London School of Economics.
He has previously written for a wide range of publications, including the Guardian and the Economist, and also helped to run a newsletter on terrorism. He has spent time at Lehman Brothers, Citigroup and the consultancy Lombard Street Research.
Matthew is the author of Superinvestors: Lessons from the greatest investors in history, published by Harriman House, which has been translated into several languages. His second book, Investing Explained: The Accessible Guide to Building an Investment Portfolio, is published by Kogan Page.
As senior writer, he writes the shares and politics & economics pages, as well as weekly Blowing It and Great Frauds in History columns He also writes a fortnightly reviews page and trading tips, as well as regular cover stories and multi-page investment focus features.
Follow Matthew on Twitter: @DrMatthewPartri
-
Albert Einstein's first violin sells for £860,000 at auction
Albert Einstein left his first violin behind as he escaped Nazi Germany. Last week, it became the most expensive instrument not owned by a concert violinist
-
Rob Granieri: the mysterious billionaire boss of Jane Street
Profits at Jane Street have exploded, throwing billionaire Rob Granieri into the limelight. But it’s not just the firm’s success that is prompting scrutiny
-
Albert Einstein's first violin sells for £860,000 at auction
Albert Einstein left his first violin behind as he escaped Nazi Germany. Last week, it became the most expensive instrument not owned by a concert violinist
-
Who is Rob Granieri, the mysterious billionaire leader of Jane Street?
Profits at Jane Street have exploded, throwing billionaire Rob Granieri into the limelight. But it’s not just the firm’s success that is prompting scrutiny
-
Emerging markets boast top-quality growth stocks at bargain prices
Opinion Lim Wen Loong, investment director at Ashoka WhiteOak Capital, selects three growth stocks where he’d put his money
-
Beware the bubble in bitcoin treasury companies
Bitcoin treasury companies are no longer coining it. Short this one, says Matthew Partridge
-
Klarna leads a financial revolution – should investors buy?
Klarna has ambitions to rewire the global payments system and has huge growth potential
-
New faces don’t solve old problems – why strategy also matters when it comes to investment trusts
Opinion Changing managers often fails to boost a trust’s performance, says Max King
-
How to profit from silver’s record rise
Silver often lets investors down, but there may now be room for further gains, says Dominic Frisby
-
Are venture-capital trusts worth investing in?
Venture-capital trusts are a tax-efficient way to invest in early-stage companies. But are they worth the risk?