Klarna Group Plc Chief Executive Officer Sebastian Siemiatkowski didn’t sell any shares in his company’s blockbuster IPO this week — but he still managed to use the listing to consolidate his control over the company. Ahead of the offering, the 43-year-old founder pledged Klarna shares as collateral to secure a $112 million loan, according to a person familiar with the matter. The lender SEB AB provided the funding last month, with Siemiatkowski pledging a roughly $980 million stake in exchange as collateral, based on Klarna’s IPO price and regulatory filings. After securing the financing at a low loan-to-value ratio of 10%, he used the proceeds from the loan to buy out another investor in a special purpose vehicle that owns shares of Klarna, the person said, asking not to be identified discussing non-public information. While Siemiatkowski already controlled the special purpose vehicle, the deal allowed him to further increase his economic interest in the company, the person said. That bet is already paying off. Siemiatkowski’s Klarna stake has risen more than $65 million in value since the company began trading Wednesday, adding to the equity buffering his share pledge, according to Bloomberg calculations. He now holds a stake worth more than $1 billion even after Klarna’s shares fell 6.7% on Thursday, reversing part of an almost 15% surge the previous day. “I’m a big believer in the company,” Siemiatkowski said in an interview. “I’ve signed up for this long term.” A spokesperson for Klarna declined to comment on Siemiatkowski’s borrowing. Simmering Tension The size of Siemiatkowski’s stake in Klarna has long been a source of simmering tension inside the company. In the lead up to the IPO, he repeatedly clashed with his estranged co-founder Victor Jacobsson. Throughout 2024, the two argued over governance, including how the company would list and how much control Siemiatkowski would ultimately have in a publicly-traded Klarna. Just three weeks before Klarna first filed to go public in 2024, the firm’s shareholders voted to oust one of the company’s board members, Mikael Walther, after he challenged some governance decisions. Walther had long represented the interests of Jacobsson on the board. The SEB transaction offers a glimpse at how the rich can leverage their assets and the perks banks offer ultra-wealthy clients. While Siemiatkowski is doubling down on Klarna, pledging stock typically helps executives diversify their wealth and boost liquidity without selling part of their major assets. Oracle Corp. Chairman Larry Ellison has put up company shares to fund a lavish lifestyle that includes trophy properties, America’s Cup sailing teams and the Indian Wells tennis facility in California. Mat Ishbia, owner of the Phoenix Suns, pledged more than half of mortgage giant UWM Holdings Corp.’s outstanding stock in 2023 to secure loans before buying the NBA team for a then-record $4 billion. 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The $1 billion stock commitment made by Klarna’s CEO has proven to be successful, resulting in a significant increase in wealth.
