Klarna Bank AB plans to raise new funds at a significantly lower valuation than it reached a year ago, according to people familiar with the situation, a sign of the punitive environment for tech companies.

The Swedish payments company is in talks with investors over a deal that could value the company at around $15 billion, the sources say, less than it was looking for last month. The Wall Street Journal reported that Klarna was in talks to raise up to $1 billion at a low valuation of $30 billion. One of the people said the ongoing talks could yield at least $500 million. There is no guarantee that an agreement will take place.

A $15 billion valuation would represent a substantial drop for Klarna, which became Europe’s most valuable fintech startup last June when SoftBank Group Corp. 9984,
Vision Fund 2 led an investment that valued the company at $45.6 billion. Other investors include Sequoia Capital, Silver Lake and Dragoneer Investment Group LLC.

Klarna specializes in buy-it-now and pay-later services, a popular type of cash advance that competes with credit cards. The services are offered to customers at the point of purchase, primarily online, and allow them to pay for goods and services in installments without paying interest. Klarna makes money by charging fees to merchants who offer Klarna’s services.

An expanded version of this story appears on WSJ.com.

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