Buy-now pay-later giant Klarna is looking to raise fresh funding at less than a third of its most recent valuation, as the rout in global tech stocks begins to spread onto private markets.
The Swedish-headquartered fintech giant, which has around 23m monthly users globally, would be worth about $30bn under the new fundraise plans as it looks to tap around $1bn from investors, the Wall Street Journal first reported.
Klarna’s most recent 2021 funding round valued the firm at $46bn, earning it the crown of Europe’s most valuable private company, with backers including VC giants like Sequoia Capital and Permira as well as Japanese investment giant SoftBank.
But the potential plunge in valuation for Klarna comes amid growing scepticism from investors towards growth-oriented tech stocks.
Soaring inflation and turbulent equity markets have caused publicly listed tech stocks to plunge in 2022 and the volatility is now predicted to spread into private markets this year.
Analysts at investment firm Pitchbook said a public market sell-off had led investors to question lofty private valuations in the first quarter of the year.
“The widespread tech public equity selloff in Q1 has increased scrutiny on the veracity of lofty private market valuations of VCbacked companies,” analysts said in the Q1 European valuations report.
They warned that the full effects of the shifting macroeconomic backdrop could feed into late-stage valuations in the coming quarters.
Klarna declined to comment.