Klarna Raises $800 Million

Klarna, a Swedish payment solutions provider, announced $800 million in new funding on Monday, but its market valuation has dropped by 85 percent from $46 billion a year ago.

Klarna said its most recent round of funding valued it at $6.7 billion, which is 85 percent less than a year ago, as investor interest in fast-growing tech ventures that have yet to turn a profit has plummeted dramatically.

The market sell-off was widespread, and Klarna's peers' valuations had also dropped by 80 to 90 percent, according to the Swedish group.

"Klarna has not been immune to significant downdrafts of fintech stock in public markets," the company stated.

The $800 million in new funding will be "primarily used to expand Klarna's leading market position in the United States," according to the company.

Klarna attributed its declining valuation to "the worst set of circumstances to afflict stock markets since World War II," citing high inflation, rising interest rates, the pandemic's lingering effects, supply chain disruptions, and "the dislocations caused by the war in Ukraine." The company had already seen the worsening economic situation impact its business and in late May, Klarna announced it was cutting its 7,000-strong workforce by around 10%.