A sharp drop in the valuation of payment app investee Klarna is expected to wipe 15% from listed unicorn investment fund Chrysalis Investments’ net asset value.
Klarna’s valuation sunk from a US$45.6bn at the last round in June to just US$6.5bn, based on its latest funding round, the Wall Street Journal reported.
The ‘buy now, pay later’ unicorn is now seeking to raise US$650mln from primarily existing investors. Earlier reports suggested that it wanted to raise at least US$500mln at a huge valuation of US$15bn.
In May, the fintech unicorn said it was reducing its 7,000–strong global workforce by 10% as it warned of a “likely recession”, blaming the war in Ukraine, changes in consumer confidence, surging inflation and a volatile stock market.
Asset manager Jupiter's Chrysalis fund has lost more than 62% of its share value in six months, as investees such as fintech firm Klarna battle these new headwinds.
Based on its valuation in March, Klarna was the second-largest investment in Chrysalis’s fund portfolio, representing 19% of net asset value.
The valuation of its investment for the period through to 31 March was based on a US$30bn valuation of the business, Liberum said.
The latest funding round would reduce the fund’s net asset value by 15% or 31p per share, its analysts predict.
“We estimate a pro-forma NAV of 179p,” Liberum said.
“Further valuation reductions are inevitable across other portfolio companies given the weakness in growth markets, although the company does have protection mechanisms which should offset some valuation declines.”
Its shares fell 2.18% on Monday to 94.1p each.