Klarna has raised $800 million in a new investment round. However, the company's valuation is down 85%

The share price on the new round is $225, down from last year's price of $1,606. On the secondary market, Klarna stock is now at $500, a valuation of $14 billion.

The round was backed by existing investors Sequoia, Bestseller, Silver Lake, and new ones, including the UAE’s sovereign fund Mubadala and Canada Pension Plan Investment Board.

In June 2021, Klarna reached a valuation of $45.6 billion and became the second-largest fintech company in the world. In July 2022, investors valued the company at $6.7 billion, almost 7 times lower.

Klarna attributed the drop in valuation to a correction in the public tech company market: shares of another BNPL service, Affirm, are down more than 77% since the beginning of this year.

The $800 million raised will be used to expand in the U.S., where the company has about 30 million customers and sales have tripled in a year.

“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”, Sequoia partner Michael Moritz said in a press release.