Fintech Klarna reportedly raising at a $6.5B valuation, giving new meaning to the phrase ‘down round’

In a sign of the times, Swedish buy now, pay later giant Klarna is close to inking a new round of funding that would slash its valuation to $6.5 billion, about 7x of what the company was valued in June of 2021, according to a report.

According to the Wall Street Journal, Klarna was in talks to raise about $650 million from existing investors. The chairman of the company is also the chairman of Sequoia.

The deal is still being worked on. When it raised $639 million in a round led by SoftBank's Vision Fund 2 last year, it was seen as a sign of things to come.

Affirm and Klarna are competing with one another in the US. Over the past year, the customer base in the U.S. has grown by over 65 percent, according to the company. The whole segment of buy now pay later has taken a hit as of late but still, the huge drop in valuation for Klarna gives new meaning to the phrase "downround."

The company reached out to the woman.

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As Klarna looks to raise more capital, is it cutting its valuation enough?