Canadian pension fund backs giant Klarna with $5.8 billion “buy now, pay later” | UK News

Klarna, the buy now, pay later credit provider, is set to unveil an $800m fundraise at a valuation below $6bn, echoing deteriorating public market sentiment to technology companies.

Sky News has learned that Sweden-based Klarna is expected to announce as early as this week that it has secured funding from existing investors and new backers which could include Canada’s biggest pension fund.

Sources said on Sunday that the Canada Pension Plan Investment Board (CPPIB) and Abu Dhabi state investment fund Mubadala had been in talks with Klarna in recent weeks to participate in the fundraising. capital.

At $800 million, the size of the funding round is larger than expected in recent weeks.

The injection of new capital is undertaken at a pre-money valuation of less than $6 billion, less than 15% of Klarna’s $45.6 billion valuation just two years ago.

That would put Klarna on a post-money valuation of around $6.7 billion, according to a source.

The company’s valuation has plummeted in recent weeks, with various reports suggesting Klarna chief executive Sebastian Siemiatkowski was trying to secure funding at $30 billion, then $15 billion, then $10 billion.

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Klarna’s existing backers, including Sequoia Capital and Silver Lake, plan to participate in the latest round of funding for a company that has grown at breakneck speed in recent years to become one of the most valued technology companies. from Europe.

Its other shareholders include SoftBank’s Vision Fund.

Its dwindling valuation is partly the result of changing economic circumstances, with investors increasingly shying away from tech-focused growth companies, partly increased regulatory scrutiny, and partly the emergence of giants such as Apple. in the buy it now and pay later sector.

A Klarna spokeswoman said: “We do not comment on fundraising or valuation speculation.”

CPPIB declined to comment.

Dolores W. Simon