From Stockholm to the Stock Market: Klarna’s Remarkable Journey to IPO

Twenty years ago, Sebastian Siemiatkowski and two friends at the Stockholm School of Economics started a company after realizing how hard it was for small businesses to collect payments from online customers.

Today, we want to congratulate Klarna — founded in Europe, they have grown to become one of the largest and most successful fintech companies in the world — on their IPO.

Before Sebastian changed the world of finance, he changed the culture at IVP. While virtual presentations are common today, back in 2014, it was tradition for CEOs to come to Silicon Valley to give a presentation to the partnership before we finalized an investment. Because Sebastian was halfway around the world, he presented over a very early video call.

But even over a spotty connection, we could tell that Klarna was special.

What struck us most was Sebastian’s unwavering belief in Klarna’s mission. Though the idea of layaway wasn’t new, he and his team had adapted the “buy now, pay later” concept for the digital age. And while the company was founded in Sweden, it was clear their aspirations were to build for merchants and consumers globally.

That unshakeable confidence led to our initial investment. And it’s why we helped Klarna buy the German payment processing company Sofort. This methodical expansion from the Nordics to the continent and then the UK ultimately led to successful expansion into the US, which is now its largest market by revenue.

Along the way, Klarna has focused on creating long-term value, turning a profit for 18 out of its 21 years in existence. The team also embraced new technology, as evidenced by the fact that two-thirds of its customer service interactions are now handled by AI.

Along the way, we’ve helped introduce Klarna to potential customers and leadership hires in the U.S. And now we’re glad to see Klarna going public at a time that’s right for the business.

Ben Graham, an American financial analyst and mentor of Warren Buffett’s, famously said that, “In the short run, the market is a voting machine, but in the long run it is a weighing machine.” While it’s impossible to predict what the market will do in the short term, over the long term, we believe that investors will appreciate the incredible business Sebastian and team have built.

We can’t wait to see what’s next.