Klarna, a provider of buy-now-pay-later loans, is close to raising $800 million in funding at a valuation of less than $6 billion, echoing the public market’s worsening sentiment toward technology companies.

Sky News has learned that Sweden-based Klarna is expected to announce this week that it has secured funding from existing investors and new backers, which could include Canada’s largest pension fund.

The Canada Pension Plan Investment Board (CPPIB) and Abu Dhabi’s public investment fund Mubadala have been in talks with Klarna in recent weeks to participate in the capital raising, sources said on Sunday.

The $800 million funding round is more than expected in recent weeks.

The injection of new capital comes at a prior valuation below $6 billion, down less than 15 percent from Klarna’s $45.6 billion valuation just two years ago.

According to one of the sources, Klarna’s valuation after the cash payment will be around $6.7 billion.

The company’s valuation has fallen in recent weeks, with various reports suggesting that Klarna’s chief executive, Sebastian Siemiatkowski, was trying to raise $30 billion, then $15 billion, then $10 billion.

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Klarna’s existing backers, including Sequoia Capital and Silver Lake, are said to be planning to participate in the latest round of funding for the company, which has grown at breakneck speed in recent years to become one of Europe’s most valuable tech companies.

Its other shareholders include SoftBank’s Vision Fund.

Its decline is partly the result of changing economic circumstances, with investors increasingly shunning emerging technology-focused companies, partly increased regulatory scrutiny and partly the emergence of giants like Apple in the buy-now, pay-later sector. .

A Klarna spokeswoman said: “We do not comment on fundraising or valuation speculation.”

CPPIB declined to comment.

https://news.sky.com/story/canadian-pension-fund-backs-58bn-buy-now-pay-later-giant-klarna-12649634

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