Klarna could trigger a fintech IPO boom but can London benefit?
Klarna’s hot debut on the New York Stock Exchange has opened the doors for a flood of fintech listings but analysts are raising concerns whether the London market can enjoy this new stream.
The Swedish fintech unicorn’s stock popped 15 per cent from its IPO price of $40. Shares closed at $45.82 after raising $222m.
The firm – which is laying out plans to transform into a digital bank – netted a valuation of $15bn marking a strong start but still well below 2021’s peak of $46bn.
Russ Mould, investment director at AJ Bell, said: “Stocks can easily ‘pop’ on the first day as the broader investor base gets their first chance to buy in – and we saw that yesterday with buy now, pay later provider Klarna.”
Mould said Klarna had an “unusual share price behaviour” – shooting up on IPO before paring back some gains – but said it made it “one to watch”.
“Clearly some investors don’t believe it is worth owning at the current price. Whether that’s a straight valuation call or concerns about the business model and its prospects remains to be seen,” he added.
Klarna tests the fintech waters
Klarna’s IPO ended more than 20 times oversubscribed, Bloomberg reported.
The listing was widely watched by the fintech industry as an insight into investor appetite as firms gear up to go public.
Revolut, Monzo, Zilch and Oaknorth are just a handful of firms thought to be considering a public market float.
Lee Holmes, chief executive of broker Infinox, said “It’s not just a win for Klarna, but also a signal of renewed confidence in fintech business models that combine innovation with scale.”
But he added: “It’s clear to see the deep liquidity and investing appetite for US-listed tech stocks makes the UK appear less appealing to up-and-coming companies by the day.”
The City had been hoping to bag a batch of fintech listings in a bid to boost the ailing London Stock Exchange.
Chancellor Rachel Reeves has courted top firms and told industry bigwigs at fintech industry body Innovate Finance’s Global Summit she would make the UK the best place to “start up, scale up and list”.
Could fintech sour on the UK?
Tech M&A analyst Claire Trachet said Klarna’s IPO “underlines the gulf between the US and UK public markets”.
She added firms like Revolut were “relying” on secondary share sales instead of listing because “the UK markets simply aren’t fit for today’s scale ups”.
The City market was dealt a crushing blow after money transfer firm Wise transferred its primary listing to the US as the firm cited the “deeper liquidity” offered in New York.
Wise debuted on the London market with a valuation of near £8bn in 2021 – adding just under £4bn in the period. Klarna made close to Wise’s four-year gain in four hours on Wall Street.
It comes as newly-released figures showed the UK was staring down an investment threat from the UAE.
Total UK fintech investment fell to $7.2bn in the first half of 2025 (£5.36bn) – a drop of five per cent from the same period in 2024.
And experts also raised the alarm on emerging threats, like the UAE, which was becoming a fruitful source of private capital fundraising.
Trachet said unless the City deepened liquidity, broadened the institutional investor base and speed up regulation, it risks “becoming a market defined only by consolidation at the top rather than a healthy pipeline of new entrants”.