Sequoia Turns $500 Million Into $3.2 Billion With Klarna IPO

The Klarna IPO has delivered a remarkable $2.7 billion windfall for Sequoia Capital, underscoring one of the venture capital firm’s most lucrative bets. The buy-now-pay-later leader priced its shares at $40, pushing its market valuation to $15.1 billion. Sequoia, which invested about $500 million in Klarna, now holds a $3.2 billion stake. This six-fold return highlights a major victory at a time when venture capital firms are seeking validation for long-term bets in fintech.

The Klarna IPO also marks a symbolic moment for the company as it enters the public markets two decades after its founding. Its journey has been anything but smooth. During the pandemic, Klarna soared to a $45.6 billion valuation following a large investment from SoftBank. Yet by 2022, the mood shifted sharply, and Klarna’s value collapsed to just $6.7 billion during a broader fintech downturn. That dramatic “down round” became one of the starkest corrections in the global technology sector. However, despite the turbulence, Klarna has managed to rebuild momentum and restore investor confidence, setting the stage for its successful listing.

Investor appetite was evident as the Klarna IPO priced above the marketed range. This enthusiasm reflects growing confidence in fintech recovery and the company’s expanding vision. Klarna is no longer just about buy-now-pay-later loans. Over time, it has evolved into a broader digital finance player, offering debit cards, longer-term consumer financing, and banking products. Rivals like Affirm have also seen their shares rise more than 40% this year, signaling renewed optimism across the sector.

Behind the scenes, boardroom drama also played a role in shaping Klarna’s path to the IPO. Michael Moritz, who spearheaded Sequoia’s initial investment in 2010, remained a steadfast defender of the company even during its lowest valuation. His strong public backing helped maintain investor faith when sentiment faltered. Meanwhile, internal tensions surfaced when Sequoia partner Matthew Miller sought Moritz’s removal from Klarna’s board in 2024. That effort failed, and Miller ultimately left the firm, with Andrew Reed stepping in to restore stability before the listing.

For early investors, the Klarna IPO represents both relief and reward after years of volatility. What once seemed like a risky bet has now delivered extraordinary gains. Sequoia’s $2.7 billion profit underscores the value of conviction and patience in high-growth sectors. As Klarna shares begin trading, the IPO not only signals renewed momentum for fintech but also cements Sequoia’s reputation for backing transformative global companies.