UAE’s Mubadala helps Sweden’s Klarna raise $800m as valuation plummets 85%


Swedish global payment and purchasing services company Klarna has closed an $800 million funding round backed by Mubadala Investment Company of the United Arab Emirates and the Canada Pension Plan Investment Board (CPP Investments) as well as existing investors Sequoia and Silver Lake.

However, the high profile startup’s valuation was lowered to $6.7 billion in its latest round of funding, down about 85% from the $45.6 billion valuation it had carried out in 2021.

Announcing the $800 million funding in a series of tweets, Klarna CEO Sebastian Siemiatkowski said: “We are not immune to a 75-90% decline in our public peers and as a result , our valuation is up to par.”

“Klarna was profitable in its first 14 years of existence. 2017 = 14% EBT. Our established markets currently generate 1 billion gross profits per year. Since 2019, we have invested to become the leaders of the American market with 30 million users, 60% brand and 30 of the top 100 US sites,” he tweeted.

“As investor sentiment shifts, it’s time to get back to profitability. But now we’re doing it on a global platform, 150 million users, 20+ marketplaces and 400,000 partners. We don’t preferred stock only common stock. Other private startups are raising money and valuations are not comparable,” Siemiatkowski tweeted.

UAE sovereign wealth fund Mubadala manages assets of over $284 billion and CPP Investments of Canada manages assets of over C$539 billion.

Klarna now plans to allow all of its more than 1,000 small shareholders to participate pro rata in a process that will continue over the coming weeks.

Michael Moritz, Partner at Sequoia, said: “The change in Klarna’s valuation is entirely due to investors suddenly voting the opposite way to how they have voted in recent years. The irony is that Klarna’s business, position in various markets, and popularity with consumers and merchants are all stronger than at any time since Sequoia first invested in 2010.”

“Eventually, once investors are out of their bunkers, shares of Klarna and other blue chip companies will get the attention they deserve,” he added.

Klarna has been backed by Sequoia Capital since 2010.

(Reporting by Seban Scaria; editing by Daniel Luiz)

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