Payment service provider
Thanks to employee shares: Klarna has already produced 75 millionaires
Thanks to stock shares, 75 former and current Klarna employees have become millionaires. The number could even increase significantly next year.
The logo of the Swedish payment provider Klarna can be seen on the display of a smartphone. Berlin, April 22, 2020.
The success of the Swedish payment provider Klarna is undisputed. Founded more than 15 years ago, the Stockholm-based company is the second most valuable privately held fintech company in the world with a valuation of almost 46 billion US dollars. However, not only the founders or investors benefit from this, but also the employees of the company. Klarna has now turned 75 employees into millionaires through employee participation programs, as reported by the industry portal Sifted.
After the fintech was valued at $45.6 billion in June of this year as part of new funding from investors like Softbank, the value of employee shares has also risen rapidly. At the new value, each share was valued at $1.756 each. That's made at least 75 former and current employees who own at least 0.0022 percent of the stock paper millionaires, according to a Sifted analysis. A few employees even own shares worth more than ten million dollars. This includes the outgoing deputy managing director and Klarna's first head of IT.
More millionaires could soon follow
These fortunes still only exist on paper. But that could soon be different. The fintech recently announced that it would aim to go public in the coming calendar year. Then the employees could have the opportunity to actually benefit from their shares.
As did the co-founders of Klarna: an IPO for the company would mean an asset value of $3.1 billion for CEO Sebastian Siemiatkowski. He owns seven percent of the company's shares. Only Victor Jacobsson, another co-founder, can top that. He left the company in 2012 and still owns ten percent of Klarna.
While 75 sounds like a significant number of millionaires, there could be more to come. Because Klarna's shareholder documents have so far only listed people who have already converted their options into real shares. The number is likely to be even higher when accounting for employees who have not yet exercised their vested stock packages. According to the company's most recent annual report, 434,000 stock options are still outstanding for employees. According to recent valuations, this options pool is worth $762 million. In addition, other employees could reach the one million dollar mark and also be counted in the club of Klarna millionaires if the share price continues to rise.
Positive impact on the entire fintech industry
According to Sifted, the number of Klarna employee millionaires could have a positive impact on the entire fintech industry. Many of the employees could use the positive development as an opportunity to exit Klarna and invest in other fintech startups. There are already dozens of former employees who have founded their own startups. These include Anyfin co-founder and CEO Mikael Hussain, and Zimpler co-founder Kristofer Ekman Sinclair.
Most of the white-collar millionaires are based in Sweden and could invest in Swedish startups and young companies across the Nordic region. But even if this development paves the way for a distribution of wealth, it will not be felt everywhere for the time being. Women still make up only about 13 percent of the Klarna employees listed as millionaires in the shareholder book.
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