A Wall Street Journal report has spelled doom for buy now, pay later giant Klarna Bank.
The valuation of Klarna Bank is set to plunge to $15 billion as the buy-now, pay-later (BNPL) player seeks a $500 million fund raise.
This means that the company would no longer be Europe’s most valuable fintech. Its new valuation would be more than $30 billion less than at this time last year, when it raised $639 million in a round led by SoftBank.
The company is a BNPL checkout option through which users are able to delay or split payments interest-free.
Klarna’s current talks with investors are also a come-down from previous fundraising ambitions, when it reportedly was set to raise $1 billion at a $30 billion valuation.
Last month, Klarna announced it would dismiss about 10% of its workforce, citing a potential recession, higher inflation and a shift in consumer sentiment.
Klarna also faces increased competition in the sector, particularly from big technology companies. Earlier this month, Apple announced a foray into BNPL via Apple Pay.