The Commonwealth Bank (CBA) has sold a small stake in Swedish buy-now-pay-later fintech Klarna, worth around $100 million, as it lists in the US at more than 2x the price CBA paid for it 5 years ago.
Klarna listed at US$40, higher than the expected $35-37 price, on the New York Stock Exchange (NYSE) overnight, and saw its shares jump by 30% to hit US$52 before ending the first day of trade up 15% at $45.82.
The 20-year-old fintech went public at a $15.1 billion valuation, having raised more than US$3.8 billion in venture rounds, with CBA
CommBank owned around 19.3 million Klarna shares, worth around A$1.17bn (US$772m) at the IPO price, selling 8% of its stake, around 1.62 million shares, worth around A$99.3m (US$65.6m), during the public float.
The bank still has a 4.69% holding, 17.7 million shares, now worth A$1.226 billion (US$881m) at the closing price.
CBA helped launch Klarna in Australia in February 2020, investing US$300 million in total for a holding of more than 5%.
The bet began with an initial US$100 million (AU$145m) in 2019, for a joint-venture with Europe’s most valuable fintech at a US$5.5 billion valuation following a US$460 million raise in August 2019.
CBA CEO Matt Comyn kicked off 2020 revealing that the bank then put another US$200m, lifting its stake in the Klarna Group from an initial 1.8% to to 5.5%.
Klarna’s backers include Sequoia, Bestseller Group, Permira, Visa, H&M, Atomico, Blackrock, and even upcoming AFL grand final performer Snoop Dogg.
CBA bought another 1.8 million shares over nine months between July 2022 and March 2023, Klarna’s SEC filing shows, at an aggregate price of US$32 million.
Klarna is available through the CommBank app and the two companies jointly fund and have 50:50 ownership rights to Klarna’s Australian and New Zealand business. CBA also has a right to partner with Klarna in Indonesia.
It’s been a wild ride for both companies over the last five years. The high came in 2021, when Klarna raised US$1 bn at a US$31bn valuation in March and three months later, was valued at US$45.6 billion in June 2021. CBA’s investment was worth A$2.7 billion
But when investor sentiment shifted in 2022, Klarna was one the startups hardest hit, with its valuation falling 85% in just 12 months to US$6.7bn following a US$800m raise in July that year.
Fast forward a little over 3 years and it’s jumped nearly 200% from that low. And for now, it seems the BNPL and CBA are once again on the ascendancy.
It was also a good day for Klarna CEO Sebastian Siemiatkowski, who was 23 when he cofounded the business while doing his master’s degree.
He has 25.6 million shares, nearly 6.8% of the business, turning him into a billionaire worth about A$1.8bn.
Startup Daily contacted CBA for comment but the bank declined.
Daily startup news and insights, delivered to your inbox.