CBA in line for $1b IPO windfall from Klarna rollercoaster ride
Commonwealth Bank bought into BNPL at the height of its run before starting its own brand. Now its stake in Klarna may deliver it $1.7 billion.
Big four banking behemoth CBA could be on the brink of realising a billion dollar windfall if Klarna, the Swedish buy now pay later platform it invested in, proceeds with plans for an IPO in the US.
Bloomberg overnight reported that Klarna, once Europe's most valuable startup, is considering going public. CBA can be expected to sell into any IPO, given the potential for capital and earnings uplifts and the satisfactory performance of its own buy now, pay later offering.
CBA invested $300 million into Klarna across two tranches in 2020, during one of the hot seasons for BNPL. The investments gave it 5.5% of the Swedish outfit and half ownership of its Australia and New Zealand operations,
But in August, 2021, CBA launched its own proprietary BNPL play called StepPay. The launch followed research at that time that 76% of consumers would prefer the staged repayments system from their own bank.
