Klarna ramps up plans for £12bn stock market float

BUY now, pay later giant Klarna is taking a major step towards a stock market float that could value it at £12billion.

The Stockholm-based firm could list as soon as the first half of next year, according to reports.

It is setting up a new British holding company as part of the groundwork.

Klarna’s business model offers customers a way to spread purchases out over several payments with leading retailers including Boden, Deliveroo and H&M.

It is a controversial area of finance, however, with campaigners and MPs increasingly raising concerns that it is loading young people in particular with unsustainable amounts of debt.

The decision to set up the British holding company has been taken to reflect the worldwide respect for the UK’s high legal and regulatory standards, sources told Sky News.

Reaching the high bar required in the UK often makes it easier for companies to get the green light in other countries.

But setting up a British holding company does not mean Klarna will definitely float in London.

Speculation in the City so far has been that it will opt for New York.

But regulators and City officials are likely to try to woo the financial services behemoth to join the London Stock Exchange (LSE).

The company has been mulling a float for some time.

Founder and chief executive Sebastian Siemiatkowski, pictured, said in August that its three conditions for going public had been met.

These were to become established in the US, have a sustainable business model and significant potential for growth.

But its plans come at a time when companies offering ‘buy now, pay later’ services are coming under increasing scrutiny by regulators and politicians. City watchdog the Financial Conduct Authority (FCA) found that frequent users of these services were more likely to be in financial difficulty.

Klarna is the most established company in the sector with around 150million customers worldwide and around 5,000 employees.

A spokesman for the company said last night: ‘We have initiated a process for a legal entity restructuring to set up a UK holding company as an important early step on a journey towards an eventual initial public offering.’