As Klarna prepares for a highly anticipated $15 billion initial public offering (IPO), concerns are mounting over its recent strategic moves. The Swedish Buy Now, Pay Later (BNPL) company has formed partnerships with major players like Walmart and DoorDash, but the timing and nature of these deals have raised eyebrows. Market observers are questioning whether these agreements are driven by business fundamentals or are designed to boost investor sentiment ahead of the IPO. Klarna’s approach highlights the competitive, fast-changing landscape of digital consumer finance services in the United States.
Klarna’s decision to partner with DoorDash, offering BNPL options for food deliveries, has sparked criticism and ridicule on social media. Users compared the concept of short-term debt for food purchases to the risky lending practices that contributed to the 2008 financial crisis. In response to public reactions, Klarna CEO Sebastian Siemiatkowski stated on X,
“DoorDash offers many products beyond food! … I know we are most famous for pay in 4. But you can use a credit card at DoorDash as well.”
Did Klarna’s Walmart Deal Raise Red Flags?
What Are the Risks of BNPL in a Changing Economy?
Klarna also secured a deal with Walmart, granting the retailer 15.3 million stock warrants valued at approximately $500 million. Analysts question the motive behind the offer, suggesting it may be an effort to build IPO momentum. Dan Dovel, an analyst at Mizuho, criticized the move, saying,
“It’s really an expensive press release.”
Walmart already had an existing relationship with Affirm, a competing BNPL provider, adding to the speculation around Klarna’s strategy.
The IPO comes as the U.S. BNPL market has expanded rapidly, now totaling an estimated $175 billion. While BNPL still represents a small portion of overall consumer spending, its growth has been significant. However, industry experts warn that the model is vulnerable to economic fluctuations and rising interest rates, which could squeeze margins and increase credit risk.
Data from PYMNTS Intelligence indicates that 51.2% of American BNPL users rely on it out of necessity, compared to 46.1% who use it for convenience. The report also suggests that BNPL usage is broadening beyond financially strained consumers. As consumer demand for installment-based payment options grows, competition among fintech companies and traditional banks is intensifying.
Earlier reports about Klarna’s IPO preparations did not include the recent DoorDash agreement or the offer of stock warrants to Walmart. Previous coverage mainly focused on Klarna’s valuation and its ongoing regulatory scrutiny in the U.S. and Europe. The latest developments mark a shift in focus toward tactical partnerships and their impact on Klarna’s financial and public perception just ahead of its market debut.
Klarna’s current strategy reflects a broader trend in the fintech sector, where companies seek rapid user and merchant growth through high-visibility deals. While partnerships with Walmart and DoorDash may increase Klarna’s reach, the associated risks—such as consumer over-indebtedness and reputational backlash—remain significant. Investors and regulators are closely watching how these moves impact Klarna’s IPO and long-term viability. For consumers, the growth of BNPL may offer more flexibility, but it also raises questions about sustainable financial behavior and adequate oversight of these services. Monitoring how Klarna navigates these challenges post-IPO will provide insights into the viability of BNPL as a mainstream credit model.
