Klarna's reclusive co-founder uses opaque structure to buy shares

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Victor Jacobsson, the reclusive co-founder at the center of Klarna's boardroom conflict, bought a stake in the company through a special purpose vehicle to become one of its largest shareholders ahead of an expected initial public offering .

The exact size of Jacobson's ownership is unclear, in part because he holds shares through multiple corporate entities. However, his stake is worth hundreds of millions of dollars and could exceed CEO Sebastian Siemiatkowski's roughly 8% stake, according to people familiar with the matter.

Jacobsson co-founded the $6.7 billion Swedish buy now, pay later company Klarna in 2005 with Siemiatkowski, the group's current leader. Jacobson left Klarna in 2012, despite serving as the company's chief financial officer in his early years.

Jacobson has been one of the company's most active investors for years, using his “right of first refusal” to buy Klarna shares on the secondary market through a special purpose vehicle, according to people familiar with the matter.

He charged other investors for the vehicles and profited from his rights as a co-founder, according to people familiar with the matter. Simyatkovski also solidified his position at Klarna through special purpose vehicles.

Jacobson directly owns about 4% of the company, but his stake could more than double if his indirect holdings are taken into account, people familiar with the matter said.

A person familiar with the matter said he had “a strong desire to buy”.

It's unclear exactly how Jacobson financed those purchases, including the extent to which he worked with third parties.

In recent weeks, Jacobson's move came after Klarna's biggest investor, Sequoia Capital, which holds a 22% stake, failed to oust Michael Moritz, the venture capital group's former leader, as chairman. The size of the holdings and their influence on the company are closely watched.

At the heart of the conflict is tension among some shareholders over the influence of Klarna's corporate governance. One person said special voting rights had become akin to a “shadow governance structure that hinders the board's ability”.

Klarna is setting up a new UK holding company as part of plans to simplify its corporate structure and change domiciles ahead of an expected New York listing.

Once a company relocates, certain investors may no longer have the same special rights under the new shareholders agreement.

Two issues that emerged in the boardroom debate were whether Klarna's co-founders and some other shareholders would retain special rights to buy shares, and whether Siemiatkowski should receive super-voting shares after Klarna's expected IPO, according to people familiar with the matter. Disagreement.

A spokesman for Siemiatkowski said there were no proposals to introduce special rights for any shareholders and that the CEO supported their removal.

When Jacobson met Simiatkovsky at the Stockholm School of Economics, he was one of the first to see the company's promise. However, Klarna’s founders took a different path.

Siemiatkowski is one of the buy now, pay later industry’s most outspoken advocates. Jacobson, who now rarely speaks publicly, has been pursuing his own investments in venture capital and growth companies since leaving the company. The third co-founder, Niklas Adalberth, sold most of his shares several years ago to form a foundation.

Both Klarna and Jacobson declined to comment.