In a statement, Klarna’s CEO Sebastian Siemiatkowski tried to downplay the significant decline, pointing to the “worst stock downturn in 50 years” and comparing its valuation to 2019 levels.
“It’s a testament to the strength of Klarna’s business that, during the steepest drop in global stock markets in over fifty years, investors recognized our strong position and continued progress in revolutionizing the retail banking industry,” Siemiatkowski said.
“Now more than ever, businesses need a strong consumer base, a superior product, and a sustainable business model.”
In a series of tweets, Siemiatkowski added that the company’s business was not immune to market currents impacting BNPL service providers, which are all seeing a considerable downturn from their peak valuations.
Affirm, for example, has seen its stock value decline by 77% since the start of the year. Meanwhile, PayPal and Block’s Afterpay are down 64% and 61%, respectively, during the same time frame, according to CNBC.
Klarna’s latest investment round was supported by Canada Pension Plan and Abu Dhabi’s Mubadala Investment Company, in addition to existing investors, including Sequoia, the founders, Bestseller, Silver Lake, and Commonwealth Bank of Australia.
Sequoia Partner Michael Moritz came to Klarna’s defense, adding that the downturn in the company’s valuation is a function of investor sentiment and not necessarily how consumers perceive the company’s BNPL solution.
“The shift in Klarna’s valuation is entirely due to investors suddenly voting in the opposite manner to the way they voted for the past few years. The irony is that Klarna’s business, its position in various markets, and its popularity with consumers and merchants are all stronger than at any time since Sequoia first invested in 2010,” he said. “Eventually, after investors emerge from their bunkers, the stocks of Klarna and other first-rate companies will receive the attention they deserve.”