Now that Klarna has a new valuation, is Affirm cheap? – Nob6

Klarna’s announcement that its long-expected funding spherical has come to a detailed introduced with it one of many steepest valuation resets in reminiscence, at the very least so far as working companies are involved. Now price $6.7 billion after elevating $800 million, the European BNPL supplier is price a fraction of its self simply final yr, although the brand new warfare chest means the corporate is now well-fueled to execute its marketing strategy.

The motion of Klarna’s worth has been one thing to behold. Coming into 2022 price greater than $46 billion, costs for the corporate’s subsequent funding spherical have been reportedly initially round the $50 billion mark. That turned one thing round $30 billion, then $15 billion, then $10 billion. Klarna’s last worth lower feels punitive. However is it actually? And now that Klarna has seen its valuation come down so very sharply, is Affirm — a U.S.-based, publicly listed rival within the purchase now, pay later (BNPL) area — low cost?

Let’s do some math and discover out.

Klarna versus Affirm: A lesson in fintech valuations