Connect with us

Finance

Klarna scores payment deal with Uber ahead of anticipated IPO 

Published

on

The Swedish “buy now, pay later” pioneer said Tuesday that its new design would help users find the items they want by using more advanced AI recommendation algorithms, while merchants will be able to target customers more effectively.

Rafael Henrique | SOPA Images | LightRocket via Getty Images

Klarna on Wednesday announced a global partnership with Uber to power payments for the ride-hailing giant’s Uber and Uber Eats apps.

The partnership will see the Swedish financial technology firm added as a payment option in the U.S., Germany and Sweden, Klarna said in a statement. 

In those countries, Klarna will roll out its “Pay Now” option in the two apps, which lets customers pay off an order instantly in one click. Users will be able to track all their Uber purchases in the Klarna app.

The company will also offer an additional payment option for Uber users in Sweden and Germany, allowing users to bundle purchases into a single, interest-free payment that gets removed from their monthly salary.

Interestingly, the company isn’t rolling out installment-based “buy now, pay later” plans, arguably Uber’s most popular service offering, on its platforms.

Sebastian Siemiatkowski, CEO and co-founder of Klarna, said in a statement Wednesday that the deal represented a “significant milestone” for the company.

Klarna's new credit card is a 'healthier alternative' to others, says CEO Sebastian Siemiatkowski

“Consumers can Pay Now quickly and securely in full, which already accounts for over one third of Klarna’s global volumes, and more easily manage their finances in one place,” Siemiatkowski said.

Klarna declined to disclose the financial terms of its deal with Uber.  

Big pre-IPO merchant win

The Uber deal marks one of the most significant merchant wins for Klarna as of late and comes as the European fintech giant is rumored to be gearing up for a blockbuster initial public offering that could value the firm at just north of $20 billion. 

Klarna began having detailed discussions with investment banks to work on an IPO that could happen as early as the third quarter, Bloomberg News reported in February, citing unnamed sources familiar with the matter. 

CNBC could not independently verify the accuracy of the report. Klarna has said that it doesn’t comment on market speculation. 

Such a market flotation would mark a turnaround for a company that saw $38.9 billion erased from its valuation in 2022 when deteriorating macroeconomic conditions stoked by Russia’s invasion of Ukraine caused a reset of sky-high tech valuations. 

Klarna reached an eye-watering $45.6 billion in a 2021 funding round led by SoftBank, before seeing its market value fall to $6.7 billion the following year in a so-called “down round.” 

The firm recently launched a monthly subscription plan in the U.S. to lock in “power users” ahead of its anticipated IPO. 

The product is called Klarna Plus and costs $7.99 per month. Klarna Plus enables users to get service fees waived, earn double rewards points and access curated discounts from partners, such as Nike and Instacart. 

Last year, Klarna reported its first quarterly profit in four years after cutting its credit losses by 56%.

The company posted an operating profit of 130 million Swedish krona (roughly $11.7 million) in the third quarter of 2023, swinging to a profit for a loss of 2 billion Swedish krona (roughly $183.6 million) in the same period a year earlier.

Buy now, pay later boom

Klarna is one of many “buy now, pay later” services that allow users to pay off their purchases over a period of monthly installments.  

The payment method has become increasingly popular among consumers who are making online and in-person shopping purchases. It also can be an alternative to credit cards charging interest and high fees. 

However, it has also stoked concerns about the affordability of such services, and whether it is in fact encouraging some consumers — particularly younger people — to spend more than they can afford. 

In the U.K., the government has proposed draft laws to regulate the “buy now, pay later” industry. 

The U.S. Consumer Financial Protection Bureau has previously said that it plans to subject “buy now, pay later” lenders to the same oversight as credit card companies. 

Meanwhile, the European Union last year passed a revised version of its Consumer Credit Directive to include “buy now, pay later” services under the scope of the rules. 

For its part, Klarna has defended the “buy now, pay later” model, arguing that it offers customers a cheaper way to access credit compared with traditional credit cards and consumer loans. 

The company also said it welcomes regulation of “buy now, pay later” products.

Continue Reading

Finance

DeepSeek AI excitement spills over to Hong Kong’s IPO market

Published

on

The Exchange Square Complex, which houses the Hong Kong Stock Exchange, on Feb. 26, 2025.

Bloomberg | Bloomberg | Getty Images

BEIJING — Chinese companies are jumping at a window of opportunity to go public in Hong Kong as global investors start to return to the region, following the news of DeepSeek’s artificial intelligence breakthrough in late January.

It’s a level of excitement that has not been felt for more than three years, despite the overhang of U.S. trade tensions. Initial public offerings are a lucrative way for early investors in startups to exit and reap a return.

“Everyone is working so perfectly together. IPO candidates, the investor and the regulators,” said George Chan, global IPO leader at EY. “All these three parties are working so perfectly at this moment to actually cultivate a healthy Hong Kong IPO market.”

“The U.S. long-term fund has returned. It shows investors are getting more confident [about] China,” he said, adding that post-IPO performance has also been encouraging.

Chinese bubble tea giant Mixue went public on March 3 in a highly oversubscribed Hong Kong listing. And in a sign of more to come, Chinese battery giant Contemporary Amperex Technology (CATL) filed in February for what could be Hong Kong’s largest IPO since 2021, when short-video company Kuaishou listed.

Still think it is a little risky to bet on specific companies or industries in China: GAO Capital

News of China-based DeepSeek’s claims to rival OpenAI’s ChatGPT in reasoning capabilities at a lower cost — despite U.S. restrictions on Chinese access to advanced chips for training AI models — hit global tech stocks in late January, while spurring a rally in China. Hong Kong’s Hang Seng index surged to three-year highs.

Chinese President Xi Jinping also held a rare meeting with tech entrepreneurs in February, and Beijing has signaled greater support for the private sector, after taking a more restrictive stance in recent years.

Six initial public offerings in Hong Kong raised more than 1 billion Hong Kong dollars ($130 million) in the first quarter — a jump from just one listing of that size in the year-ago period — according to KPMG.

In all, the consultancy said, Hong Kong saw 15 IPOs in all of the first quarter which raised 17.7 billion HKD — the best start to a year since 2021.

There’s still a long way to go before recovering to that level. Hong Kong saw 32 IPOs in the first quarter of 2021 that raised a whopping 132.7 billion HKD, according to KPMG.

The Hong Kong stock exchange has adjusted its listing rules in the interim, including ones that support companies already listed in mainland China to offer shares in Hong Kong.

In addition to CATL, other companies listed in mainland China — Hengrui Pharmaceuticals, Mabwell, Haitian Flavoring and Food, Fortior Tech and Sanhua Intelligent Controls — are “actively seeking Hong Kong listings,” said Tiger Brokers, an underwriter of many Chinese companies’ IPOs in the U.S. and Hong Kong.

“Chinese regulators are encouraging companies to list in Hong Kong to broaden financing channels and support the outbound merger and acquisition needs of Chinese enterprises,” the firm said.

Still not out of the woods

Back in the summer of 2021, the fallout over Chinese ride-hailing company Didi’s IPO in the U.S. prompted both countries’ regulators to scrutinize what was then a wave of Chinese companies listing in New York.

The major issues have since been resolved and Beijing has clarified rules for Chinese companies wanting to list outside the mainland. But the Trump administration indicated in its “America First Investment Policy” that it could increase scrutiny on U.S. capital flowing to China, on top of heightened tariffs.

The U.S. and China have yet to indicate when their two leaders might meet in an attempt to forge a deal. A surge of interest in AI and tech are also not yet enough to speed up a recovery in China’s economy.

“At this point in time, all we can see is the good indicators,” EY’s Chan said. But “there could be one single incident happening which could pretty much reverse the trend.”

“Things tend to have a pattern,” he said. “If things can keep on for three months, four months, it will likely continue for the rest of the year.”

Continue Reading

Finance

Treasury Secretary Bessent says market woes are more about tech stock sell-off than Trump’s tariffs

Published

on

Treasury Secretary Scott Bessent speaks to reporters outside the West Wing after doing a television interview on the North Lawn of the White House on March 13, 2025 in Washington, DC. 

Andrew Harnik | Getty Images

Treasury Secretary Scott Bessent said Wednesday the sell-off in the stock market is due more to a sharp pullback in the biggest technology stocks instead of the protectionist policies coming from the Trump administration.

“I’m trying to be Secretary of Treasury, not a market commentator. What I would point out is that especially the Nasdaq peaked on DeepSeek day so that’s a Mag 7 problem, not a MAGA problem,” Bessent said on Bloomberg TV Wednesday evening.

Bessent was referring to Chinese AI startup DeepSeek, whose new language models sparked a rout in U.S. technology stocks in late January. The emergence of DeepSeek’s highly competitive and potentially much cheaper models stoked doubts about the billions that the big U.S. tech companies are spending on AI.

The so-called Magnificent 7 stocks — Apple, Amazon, Tesla, Alphabet, Microsoft, Meta and Nvidia — started selling off drastically, pulling the tech-heavy Nasdaq Composite into correction territory. The tech-heavy benchmark is down about 13% from its record high reached on December 16.

However, the secretary downplayed the impact from President Donald Trump’s steep tariffs, which caught many investors off guard and fueled fears of a re-acceleration in inflation, slower economic growth and even a recession. Many investors have blamed the tariff rollout for driving the S&P 500 briefly into correction territory from its record reached in late February. Wall Street defines a correction as a drop of 10% from a recent high.

Stock Chart IconStock chart icon

hide content

S&P 500, YTD

Trump signed an aggressive “reciprocal tariff” policy at the White House Wednesday evening, slapping duties of at least 10% and even higher for some countries. The actions sparked a huge sell-off in the stock market overnight, with the S&P 500 futures declining nearly 4% and the blue-chip Dow Jones Industrial Average shedding 1,100 points. The losses will likely but the S&P 500 back into correction territory in Thursday’s session.

“It’s going to be fine if we put the best economic conditions in place,” Bessent said in a separate interview on Fox Wednesday evening. “If you go back and look, the stock market actually peaked on the [DeepSeek] Chinese AI announcement. So a lot of what we have seen has been just an idiosyncratic tech sell-off.”

Continue Reading

Finance

Conservative cable channel Newsmax shares plunge more than 70% after a dizzying 2-day surge

Published

on

A Newsmax booth broadcasts as attendees try out the guns on display at the National Rifle Association (NRA) annual convention in Houston, Texas, U.S. May 29, 2022. 

Callaghan O’hare | Reuters

Shares of conservative news channel Newsmax plunged more than 70% on Wednesday as its meteoric rise as a new public company proved to be short-lived.

The stock tumbled a whopping 72% in afternoon trading, following a 2,230% surge in Newsmax’s first two days of trading after debuting on the New York Stock Exchange. At one point, the rally gave the company a market capitalization of nearly $30 billion — surpassing the market cap of legacy media companies like Warner Bros. Discovery and Fox Corp.

Newsmax was listed on the NYSE via a so-called Regulation A offering, instead of a traditional IPO. Such an offering allows small companies to raise capital without undergoing the full SEC registration process. The primary focus is to sell to retail investors, in this case It was sold to approximately 30,000 retail investors. 

The public offering indeed garnered the attention from retail traders, some of whom touted the stock as the “New GME” in online chatrooms. GME refers to the meme stock GameStop, which made Wall Street history in 2021 by its speculative trading boom.

Newsmax has a small “float,” or shares available for trading. Less than 6% of Newsmax shares, or 7.5 million shares out of a total of 128 million fully diluted shares, are available for public trading.

The conservative TV news outlet has seen its ratings rise with the election of President Donald Trump and other prominent Republicans — although it still falls behind the dominant Fox News. Overall, Newsmax ranks in the top 20 among cable network average viewership in both prime time and daytime, Nielsen said.

Continue Reading

Trending