Chrysalis sells off Klarna stake for £34m after stock plunge
Chrysalis Investments has sold off its remaining stake in buy now, pay later firm Klarna following a bruising plunge in the fintech’s value over the last year.
The British investment trust said on Monday it had offloaded its remaining holdings in the Swedish company for £34m, which followed on from a £6m sale in July.
Chrysalis sold the stake at a higher value than it had recently attached to the firm on its books, it said, reversing some of the steep markdowns it took on Klarna earlier this year.
The group said it would hand £25m from the sale back to shareholders as part of a share buyback program. Around £9m is set to be maintained by Chrysalis to provide a “prudent operating capital buffer” and flexibility for potential follow-on investments.
Klarna made up around 6.5 per cent of the trust’s net assets as of March 2026. Digital bank Starling makes up the lion’s share at just shy of 60 per cent.
Chrysalis marked down the value of its holding in Starling by five per cent to £356m in the second quarter of the year, leading to an overall drop of of 2.35p per share in the group’s portfolio value. It said the main driver behind the write-down was a decline in valuation multiples among the “upper quartile” of its peers, which tracks high-growth fintechs and digital banks.
Klarna’s rough ride since IPO
The Klarna sale follows the firm’s public debut in New York just over 12 months ago. The firm’s stock popped 15 per cent from its 20-times oversubscribed IPO and closed its first session at $45.82 after raising $222m.
But cracks quickly started to show with the fintech’s shares now down some 70 per cent since its entrance to the public market.
In August, Klarna downgraded its volumes target for the year following unfavourable currency shifts and reduced activity from softer European volumes.
The Swedish fintech unicorn reduced its expectations for gross merchandise volume (GMV) – which measures the total sales value of everything sold on a platform before any fees or costs are taken out – to between $149bn and $151bn. Previously the firm was expecting GMV in excess of $155bn.
This came as its revenue forecast was cut to between $4.08bn and $4.16bn for the current financial year, down from its previous forecast of over $4.34bn (£3.21bn). The firm cited an accounting adjustment related to its Fair Financing loans in the US and Germany.
Despite this, Klarna upgraded its transaction margin dollars, which measures how much real cash the firm retains from activity. The target was upgraded from $1.61bn to between $1.62bn and $1.65bn after a boost in income streams that require less transaction costs.