Canadian pension fund backs $5.8bn ‘buy now pay later’ giant Klarna

Klarna, the buy-now-pay-later credit provider, is close to unveiling an $800m fundraising at a valuation of less than $6bn, echoing deteriorating public market sentiment towards technology companies.

Sky News has learnt that Klarna, which is based in Sweden, is expected to announce as soon as this week that it has secured the funding from existing investors and new backers which could include Canada’s largest pension fund.

Sources said on Sunday that the Canada Pension Plan Investment Board (CPPIB) and the Abu Dhabi state investment fund Mubadala had been in talks with Klarna in recent weeks about participating in the capital-raising.

At $800m, the size of the funding round is larger than had been anticipated in recent weeks.

The injection of new capital is being undertaken at a pre-money valuation of below $6bn, less than 15pc of Klarna’s $45.6bn valuation just two years ago.

That would place Klarna on a post-money valuation of about $6.7bn, according to one source.

The company’s valuation has tumbled in recent weeks, with various reports suggesting Klarna’s chief executive, Sebastian Siemiatkowski, was trying to secure funding at $30bn, then $15bn and then $10bn valuations.

Existing Klarna backers including Sequoia Capital and Silver Lake are said to be planning to participate in the latest funding round for a company which has grown at breakneck speed in recent years to become one of Europe’s most richly-valued technology companies.

Its other shareholders include SoftBank’s Vision Fund.

Its fading valuation is partly the result of changing economic circumstances, with investors increasingly shunning tech-focused growth companies, partly increased regulatory scrutiny, and partly the emergence of behemoths such as Apple in the buy-now, pay-later sector.

A Klarna spokeswoman said: “We do not comment on fundraising nor valuation speculation”.

CPPIB declined to comment.