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Klarna’s board is weighing the removal of a crucial ally of one of the company’s co-founders, in what would be the second big upheaval of the Swedish fintech’s board in recent months as it prepares for a blockbuster listing.
A decision on whether to oust Mikael Walther, a confidante of founding partner Victor Jacobsson, could be reached at a board meeting scheduled for Wednesday, two of the people said.
It is still possible that the board members will decide against pushing to oust Walther. But the potential vote highlights tensions at a critical point for the buy-now, pay-later pioneer, months after another high-profile boardroom schism and ahead of a long-awaited initial public offering that could value it at between $15bn-$20bn.
Klarna and Walther declined to comment.
The attempt to remove Walther after eight years follows a two-year investigation, according to people with knowledge of the matter. One person familiar with the probe downplayed its significance and said it was being used a device to exert pressure on him.
However, discussions over Walther’s potential ousting are the latest indication of disagreements over the composition of the company’s board, after a tussle between board member Michael Moritz, a Sequoia Capital veteran, and the venture capital firm’s board representative Matthew Miller erupted into public view in February.
That effort to dislodge Moritz, an ally of Klarna chief executive Sebastian Siemiatkowski, from his role as chair of the board backfired and Miller was replaced by another Sequoia partner, Andrew Reed.
The chaotic episode highlighted deep rifts on the board which emerged as Klarna prepared to redomicile from Sweden to the UK ahead of the expected IPO, almost 20 years after its founding.
Tensions about the outsized influence of some shareholders on Klarna’s decision-making because of historic special voting rights were at the centre of the conflict, the Financial Times previously reported.
Jacobsson, who founded the firm alongside Siemiatkowski but left more than a decade ago, used his “right of first refusal” as a co-founder to buy up Klarna shares through special purpose vehicles and charged outside investors fees to buy its equity.
Walther’s use of SPVs to build up a stake in the company formed part of the probe, people familiar with the matter said.
The use of SPVs has been controversial with some Klarna directors because of their perceived opacity.
However, one person familiar with the arrangement previously told the FT they were “standard onshore entities” and that for “investors and others who need to know, these entities are very clear and transparent”.
Siemiatkowski has also previously bolstered his position in Klarna through a SPV.
A person familiar with the dispute said that using SPVs as a justification for seeking to remove Walther from the board was an “excuse” and that “the central issue now is whether Klarna should introduce golden shares before the IPO”, a move that could hand certain shareholders greater influence over the company once it lists.
Klarna had in recent months been preparing for an IPO by lining up investment banks, having completed its shift to the UK in May.
The company, which reported its half-year results earlier on Tuesday, has trimmed its losses and touted the benefits of artificial intelligence to its operations.
Siemiatkowski told the FT after the results that he was “very happy that the company has taken some of the critical steps to prepare for an IPO”, and that only “macro conditions” such as the state of the markets could derail the float.
“There is nothing that I see currently that is Klarna-related that has any implications on our road map to becoming a public company,” he said.
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