Swedish fintech giant Klarna has taken a significant step towards its highly anticipated US initial public offering (IPO) by making its F-1 prospectus public. According to reports, Klarna is seeking to raise at least $1 billion in its IPO at a valuation of $15 billion.

The public documents, however, do not yet reveal how many shares Klarna plans to sell or the price range. This information is typically disclosed around a month after the prospectus documents are made public, allowing investors to digest the details. Despite the uncertainty, Klarna's bankers may have indications that investors will be willing to bite at the proposed valuation.

One reason for this confidence could be Klarna's recent rebound in private valuation to $14.6 billion, following an increase in stake by one investor. Additionally, the company has reported a profit, with revenue of $2.8 billion for 2024, up from around $2.3 billion in 2023. Klarna also reported a net profit of $21 million in 2024, a significant swing from a loss of -$244 million in 2023.

Klarna, founded in 2005 by its current CEO Sebastian Siemiatkowski, is a leading player in the "buy now, pay later" financing space. The company launched in the US in 2015 and quickly reached a valuation of over $45 billion by 2021. However, when the 2021 venture capital valuation bubble burst, Klarna's valuation plummeted by 85% to $6.5 billion.

In recent news, Klarna has been making headlines for developing its own in-house AI system based on OpenAI's ChatGPT. The company has also announced that it dropped its contract for Salesforce CRM to use its internal systems instead. According to Siemiatkowski, the homegrown ChatGPT-powered customer service bot led to replacing 700 full-time contract employees and a savings of approximately $40 million annually.

Siemiatkowski further stated that Klarna stopped hiring aggressively due to its use of AI, resulting in a workforce reduction from 5,000 in 2023 to about 3,500 by the end of 2024. This development highlights the significant impact of AI on the company's operations and cost structure.

The successful implementation of AI-powered solutions could be a key factor in Klarna's ability to attract investors and achieve its desired valuation. As the fintech landscape continues to evolve, Klarna's IPO will be closely watched by industry observers and investors alike. With its strong revenue growth and profitable operations, Klarna is poised to make a significant impact on the public markets.

As the company moves forward with its IPO plans, it will be important to monitor its progress and assess the market's response to its listing. With a valuation of $15 billion on the table, Klarna's IPO has the potential to be one of the most significant fintech listings in recent years.