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Swedish Buy Now Pay Later (BNPL) giant Klarna, once Europe’s most valuable start-up, is suffering a remarkable fall from grace, with its latest fundraising round indicating a 85 per cent reduction in value in just 12 months.

In June 2021, the fintech company raised around €600 million in a funding round that valued it at €45 billion, making it Europe’s most highly valued private fintech company.

In early February 2022, the company was rumoured to be weighing plans to raise further funding that would price it as high at €60 billion.

Come May, however, around 700 employees, amounting to a tenth of its workforce, were let go, with CEO and founder Sebastian Siemiatkowski pointing to “a tragic and unnecessary war in Ukraine, a shift in consumer sentiment, a steep increase in inflation, a highly volatile stock market and a likely recession”.

That same month, Klarna sought to tap capital markets again at a valuation of around €30 billion – just half of its target just three months prior.

The problems, however, were just beginning.

On 16th June, what was by then formerly Europe’s most valuable start-up was considering raising capital at a valuation of around €15 billion.

Even that discounted price, however, was seemingly too much for investors, and on 1st July, the Wall Street Journal reported that a new funding round was valuing the company at €6.3 billion – an astonishing 85 per cent decrease over its June 2021 valuation.

The fundraising woes come as investors lose interest tech ventures that have yet to turn a profit while burning tens of millions of euro in cash, while Apple’s recent entry into the market effectively brought a whale of a competitor into play.

Tech stocks have been suffering in recent months. In May, following the publication of first quarter reports indicating that the massive boom in online spending witnessed during the pandemic might be coming to an end, close to €1 trillion was wiped off companies’ market valuations in just a few days.

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