By Arasu Kannagi Basil and Pritam Biswas

Sept 10 (Reuters) - Swedish fintech Klarna ( KLAR ) will begin

trading on the New York Stock Exchange later on Wednesday after

raising $1.37 billion in its initial public offering, ending a

years-long wait for a listing and reinforcing a rebound in the

U.S. IPO market.

The buy-now, pay-later (BNPL) lender is leading a slate of

seven companies, including Winklevoss twins' crypto exchange

Gemini, poised to go public in New York by Friday, in what is

set to be the U.S. IPO market's biggest week in years.

The strong lineup sets the stage for an eventful fall window

after tariff-driven volatility earlier in the year had slammed

brakes on a revival of new issues following a near three-year

dry spell.

Klarna ( KLAR ) and several other big names had halted their IPO

plans in April after tariff-driven volatility roiled stock

markets.

On Tuesday, Klarna ( KLAR ) and some of its investors sold 34.3

million shares at $40 each, above the marketed range of between

$35 and $37. The IPO valued Klarna ( KLAR ) at $15.1 billion.

"This (going public) is really an opportunity...primarily for

new shareholders, our 111 million consumers and others to really

partake in that journey to disrupt the financial services

industry and be the next generation of personal finance," Klarna ( KLAR )

Chief Financial Officer Niclas Neglén told Reuters in an

interview.

Selling shareholders, including Silicon Valley venture

capital giant Sequoia Capital and Danish billionaire Anders

Holch Povlsen's Heartland A/S, raised $1.17 billion in the IPO.

CEO Sebastian Siemiatkowski, who owns about 7% of

Klarna ( KLAR ), did not sell any shares in the IPO.

Klarna ( KLAR ) is the largest Swedish company to list its shares in

the U.S. since Spotify ( SPOT ) in 2018.

"$15 billion is far from disappointing given it was above

Klarna's ( KLAR ) price range and shows a continuing trend of issuers

being conservative in initial valuation expectations to garner

investor demand and to hopefully leave them wanting more," said

Samuel Kerr, head of equity capital markets at Mergermarket.

At its peak in 2021, Klarna ( KLAR ) raised funds at a $45.6 billion

valuation, which slumped to $6.7 billion a year later amid

rising inflation and higher interest rates.

The company had eyed a New York flotation for years, having

considered a direct listing - a route that avoids selling new

shares and the costs of a traditional IPO - in 2021.

BNPL IN FOCUS

Klarna ( KLAR ), founded in 2005 when e-commerce was nascent, has

since developed into a BNPL heavyweight, helping reshape online

shopping with its short-term financing model.

BNPL allows shoppers to pay for products in small

installments over time and has gained more popularity since the

COVID-19 pandemic.

The business is gaining momentum as customers navigate

sticky inflation, labor market cracks, and slowing income

growth.

"Klarna's ( KLAR ) IPO will be a thermometer, showing how hot, or

not, investors think BNPL will be," Brian Jacobsen, chief

economist at Annex Wealth Management said.

U.S.-based rival Affirm commands a $29 billion

market valuation and its shares have surged 45% this year. Its

latest quarterly report showed an average order value of $276,

compared with Klarna's ( KLAR ) $101 for the year ended June 30,

according to its IPO filing.

While Klarna ( KLAR ) primarily targets smaller purchases and

short-term loans, Affirm has focused on big-ticket purchases

with longer zero-interest financing.

Profitable for the first 14 years, Klarna ( KLAR ) has grappled with

losses in recent years as it expanded in the U.S. and other

markets.

BNPL will steadily grab market share from debit cards in

coming years, analysts have estimated, as shoppers increasingly

embrace the flexibility to spread payments over time.