(Bloomberg) — Investors are snapping up orders for Klarna Group Plc shares ahead of its much-anticipated pricing debut late Tuesday. Part of the appeal: the buy-now-pay-later lender’s implied market valuation is currently about a 50% discount to rival Affirm Holdings Inc.
The payments company from Sweden’s offering of 34.3 million shares — with more than 80% being sold by early backers — has drawn at least eight times the orders above what’s available, Bloomberg has reported. The robust demand has prompted the banking syndicate to guide investors to expect Klarna’s initial public offering to price at $37, the top end of its marketing range or possibly higher, according to people familiar with the offering.
The IPO lands amid renewed optimism for fintech stocks, buoyed by expectations of US interest-rate cuts and friendlier regulatory signals from Washington. Despite the ebullience, the terms only give Klarna’s IPO a market value of around $14 billion, well shy of Affirm’s current $28 billion-plus market value. That markdown might seem like a bargain to investors looking to find tomorrow’s next big equity winner.
“I don’t think Klarna should trade at the same valuation multiple as Affirm at any time in the near future,” said Rohit Kulkarni, a senior research analyst at Roth Capital Markets. “But one could argue the discount that Klarna is going out with versus Affirm is an attractive one for IPO investors to consider.”
Notably, the two companies generated a similar amount of revenue in the latest quarter, but Affirm, whose shares have jumped more than 40% this year, grew faster and is more profitable.
In the three months ended June 30, 2025, Klarna’s revenue grew 21% from the prior year to $823 million — that’s less than 3% of the $31.2 billion value of purchases on its network over the same period. Meanwhile, Affirm’s revenue swelled by 33% to $876 million with the San Francisco-based firm taking home about 8% of the $10.4 billion of merchandise sold via its lending products.
There are differences in the companies’ business models. Klarna, which only entered the US market in 2019, leans more on smaller and shorter-term loans, the most common version being when the consumer pays 30 days after their purchase. Affirm’s loans are more often tied to bigger-ticket purchases and it offers longer-term zero interest options with no late fees. Klarna’s average order value was $101 in the past year, whereas Affirm’s was $276 in its most recent quarter.
“Affirm will likely always trade at a big premium, not just to Klarna but to the entire space,” said Dan Dolev, a senior fintech analyst at Mizuho Securities.
For its part, Klarna management claimed it has a more diversified and sustainable revenue model versus rivals including Capital One Financial Corp., Affirm, American Express Co. and PayPal Holdings Inc. in its IPO roadshow presentation. It also touted a more even balance between levying fees on consumers and merchants and said it’s been growing advertising revenue.
Klarna has recently pulled ahead in the adoption of buy-now-pay-later, or BNPL, which is targeting an estimated $1 trillion-plus market as an alternative to credit cards issued by traditional banks.
The 20-year old firm more than doubled its monthly active users in August from the prior year, leading BNPL firms, and topping Affirm’s 27% rise, according to Bloomberg Intelligence.
BI analyst Diksha Gera recently estimated Klarna’s value at $12 billion to $16 billion, based on a price-to-forward gross profit multiple of 11 to 14 times and projections for a roughly 12% increase in 2025.
An interest-rate cut would lower funding costs and ease BNPL underwriting while supporting volume, Mizuho’s Dolev said. On the negative side of the ledger, if the labor market continues to deteriorate, demand for loans will fall.
Klarna’s offering, initially delayed amid tariff-driven volatility, is the latest in a busy year of debuts from the fintech sector and would rank as the sector’s biggest since Chime Financial Inc. raised $864 million in an upsized offering priced in June. Chime shares bounced 37.4% in their opening session, but early enthusiasm has waned, leaving the shares below the offering price.
“Klarna’s IPO could build on momentum from neobank Chime and stablecoin issuer Circle and establish a critical benchmark, especially for European peers eyeing US listings like Revolut and Monzo,” BI’s Gera wrote. “Its success would re-accelerate fintech issuance and validate prospects for the BNPL industry. Conversely, weak demand might further delay an already cautious pipeline.”
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