(Bloomberg) -- Klarna Bank AB said revenue jumped 27% in the first half of this year, buoying adjusted profit as the fintech continues to prepare for one of the most anticipated potential initial public offerings.
The Stockholm-based company’s adjusted profit rose to 673 million kronor ($66 million) for the quarter ending in June. That compares with an adjusted loss of 456 million kronor in the same period a year ago.
The results were also helped by the fact that Klarna kept a lid on operating expenses as it continued to invest in artificial intelligence. The technology now performs the work of 700 employees, Chief Executive Officer Sebastian Siemiatkowski said in a statement announcing the results.
Investors are increasingly keeping a close eye on Klarna’s results as it continues to lay the groundwork for a potential public debut in the US next year, which could value the firm at $20 billion, people familiar with the process said previously. The firm is close to selecting Goldman Sachs Group Inc. to lead the offering, Bloomberg has reported.
Ahead of the public listing, Klarna has held early talks with investors for a sale of existing shares. The secondary share sale could help Klarna improve its valuation ahead of the public listing.
While a $20 billion valuation would be an increase from the $6.7 billion valuation it received in a 2022 funding round, it’s a far cry from the $45.6 billion valuation it received from investors in 2021 before rising interest rates sparked fears that consumers’ would be unable to repay their loans.
The company has since refocused itself ahead of the planned IPO, shedding businesses and investing in artificial intelligence. In recent months, Klarna agreed to a deal to divest its Checkout payments business for about $520 million while it also snapped up Laybuy, a provider of buy-now, pay-later services in New Zealand.
©2024 Bloomberg L.P.
