Klarna shares surge 30% on Wall Street debut as Americans ditch credit cards for buy now, pay later
A growing wave of Americans rejecting credit cards fueled Klarna’s sizzling Wall Street debut Wednesday, as the buy-now, pay-later company’s shares jumped 30% in its initial public offering.
Klarna CEO Sebastian Siemiatkowski called it a "very special" moment after the Swedish fintech giant hit a $19.5 billion valuation. The IPO raised $1.37 billion, with shares opening at $52—well above the $40 expectation.
"It is a fantastic marketing opportunity," Siemiatkowski told FOX Business’ "The Claman Countdown" on Wednesday. "In the U.S., there’s been a demand for an alternative to credit cards. People are tired of getting into debt, tired of the high interest rates that they charge, and they want a better product."
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Siemiatkowski pointed to research showing that about 20% of American households are financially secure but view credit cards as a "product of the devil."
"They want a product that is fixed installments, budgeting, easy to use… those 20% are the ones we’re catering to," he explained.
Klarna’s service is increasingly used for everyday purchases, Siemiatkowski added. He noted that the company’s Visa-powered debit card already has 5 million people on its U.S. waitlist.
"If we would even reach 5 million, that in itself already would make us one of the bigger card issuers in the U.S. actually," he said. "So, it’s a quite interesting start to something that we launched six weeks ago."
Siemiatkowski also argued that U.S. merchants are paying too much to accept credit cards, and Klarna offers a cheaper alternative.
"We’re offering this to merchants, and they’re in themselves offering that to the consumers," he said. "So it’s the merchants paying for this because they see that as they give people the 0% interest-free credit on installments, they’re increasing their sales."
Reflecting on his modest beginnings, Siemiatkowski said his mission has always been rooted in service.
"If you do something good for your customers, then you’re creating a lot of value for society, so it’s inspiring," he said.
