๐The Bulletin #71: Klarna Files for U.S. IPO, CrossFit Seeks a Buyer, and HP Acquires Humane AI Pin for $116M
In this week's bulletin โ Klarna gears up for a US IPO with a $15B+ valuation, CrossFit searches for a new owner, and HP acquires Humane AIโs assets for $116M!๐
Welcome to this weekโs edition of the VWV Bulletin! ๐
โผ๏ธ For this semester, keep up with our content if youโre interested in:
Demystifying & breaking into VC
Finding opportunities in the start-up world
Keeping up with VC investment news at Brown & beyond (pro tip: this is essential to breaking in and finding opportunities)
Enjoy!๐
๐ข Klarna Announces US IPO Filing
Klarna, the Swedish fintech giant known for its "buy now, pay later" (BNPL) services, is gearing up for its highly anticipated IPO in the US.๐บ๐ธ The company plans to list its shares on the New York Stock Exchange under the ticker symbol "KLAR," with a goal of raising at least $1 billion. Klarna is reportedly targeting a valuation exceeding $15 billion, a significant rebound from its 2022 valuation of $6.5 billion, which had plummeted during a challenging period for the fintech sector. Klarna suffered from rising interest rates and the world reopening.๐ At its peak, Klarna was valued at $45.6 billion, where it fell by 85% in the year after.ย
Leading investment banks, including Goldman Sachs, J.P. Morgan, and Morgan Stanley, are underwriting the IPO. The decision to go public comes on the heels of a strong financial performance in 2024.๐ Klarna reported a 24% increase in revenue, reaching $2.81 billion, and achieved a net profit of $21 millionโmarking a dramatic turnaround from its $244 million loss in 2023.๐ The companyโs growth has been fueled by its expanding user base of 93 million active consumers and a gross merchandise value (GMVโโessentially the total value of all goods sold on a platform or marketplace over a specific period) of $105 billion as of the end of 2024. This strong market performance showed investors the renewed strength in Klarnaโs product.ย
Strategically, Klarna has made several moves to bolster its position ahead of the IPO. Notably, it secured an exclusive BNPL partnership with Walmart, taking over from rival Affirmโa deal that could significantly enhance Klarna's footprint in the U.S. market.๐๏ธ
And their CEO Sebastian Siemiatkowski is betting big on AIโhe believes that โAI will replace the entire human workforce.โ He has been embracing this philosophy within Klarnaโwhere he has already shrunk down the workforce from 5,000 to 3,500 and is keen on bringing that number down even further to 2,000.๐ฝ
๐๏ธ Fitness up for Sale? CrossFit is Looking for a Buyer
CrossFit, the renowned fitness company known for its high-intensity workouts, has officially announced on March 12 that it is seeking new ownership.๐ค CEO Don Faul communicated this development to affiliate owners, emphasizing the search for a partner who understands the CrossFit community and appreciates its unique business model.๐ช
The company's journey to this point has been tumultuous. Founded in the 1990s by Greg Glassman, CrossFit experienced rapid growth, peaking at around 14,000 affiliated gyms globally in 2018. However, recent years have seen a decline, with the current number of affiliates hovering around 10,000.๐ This reduction coincides with a series of challenges, including leadership changes, controversies, and tragically, the death of athlete Lazar รukiฤ during the 2024 CrossFit Games.
The sale process is in its early stages, with CrossFit working alongside Moelis & Company, a global investment bank, to review potential buyers.๐ฆ While rumors have circulated about possible purchasers, Faul has emphasized that no decision has been made, and the company is committed to finding the right partner to lead CrossFit into its next chapter.๐
๐ฑ๐ The Smartphone Killer Killed? Humane AI Pin Sold to HPย
In a surprising turn of events, Humane Inc., the startup behind the much-hyped AI Pin, has announced the sale of its key assets to HP for $116 million.๐ This acquisition, revealed on February 18, marks the end of Humane's ambitious attempt to revolutionize personal technology with its wearable AI device.
The AI Pin, launched in April 2024, was positioned as a potential smartphone replacement, leveraging AI to provide a screen-free interaction experience.๐ต Despite generating significant buzz and raising over $230 million in VC funding, the device failed to meet expectations. Reviews were largely negative, with critics citing poor user experience, battery life issues, and a lack of compelling use cases to justify its $699 price tag and $24 monthly subscription fee.โ
HP's acquisition includes Humane's AI-powered platform Cosmos, its technical talent, and intellectual property comprising over 300 patents and patent applications. Notably, the deal excludes the AI Pin device business itself, which will be discontinued. Humane has informed existing AI Pin owners that their devices will cease functioning on February 28, 2025, marking a swift and definitive end to the product's short lifespan.โณ
The Humane team, including co-founders Imran Chaudhri and Bethany Bongiorno, both former Apple executives, will transition to HP to form a new division called HP IQ.๐ This AI innovation lab will focus on integrating artificial intelligence across HP's product range, from PCs to printers and connected conference rooms. HP views this acquisition as a strategic move to accelerate its development of AI-enabled devices and transform into a more experience-led company.
While the acquisition price of $116 million falls significantly short of Humane's earlier valuation aspirations of $750 million to $1 billion, it represents a lifeline for the startup's technology and team.๐ฅ
But could we rule out the death of wearable AI technology just yet? Rabbit R1, another notable wearable AI device, has just rolled into the shelves of Best Buy.๐ Other notable products like Friend.com are also poised to roll out in the near future.
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