Fintech IPO Fallout - Issue #573 Tuesday, September 30th 2025 08:25AM
The Focus
When Klarna went public earlier this month, the excitement was palpable. Oversubscribed demand, a strong first-day rally, and the spotlight on buy-now-pay-later suggested investors were finally ready to reward fintech again. Just weeks later, shares have slipped under the $40 IPO price — and with them, some of that confidence.
The problem is not just Klarna. Affirm, Block, and other fintech peers are also sliding. Higher yields mean higher borrowing costs, and for firms that rely on cheap capital to finance consumer credit, sentiment turns fast. Competition adds another layer: Stripe and Revolut command valuations that make Klarna look smaller by comparison, even as all players wrestle with credit risk and regulatory oversight.
The bigger question is whether fintech IPOs can still deliver sustained value in today’s environment. A strong first day is no longer enough; investors want durability, profitability, and resilience against macro shocks. Klarna’s decline is a reminder that public markets are less forgiving than private ones, and that the path from “hot fintech” to sustainable growth is anything but straightforward.
Read our full coverage of Klarna’s IPO test:
Klarna Shares Fall Below IPO Price as Sector Weakness Persists
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