Chrysalis suffers setback as Klarna tumbles over 40%

Chrysalis took a hit from Klarna's fall, masking uplifts from major contracts secured elsewhere.

A valuation update from Chrysalis (CHRY) today reveals the extent of damage caused by top holding Klarna, which has taken a tumble since its initial public offering (IPO) in September.

The £546m trust, which typically invests in later-stage private companies, posted a net asset value (NAV) of 165.36p for 31 December 2025 − down 3.7% over the previous three months.

‘Buy now, pay later’ service provider Klarna was the most destructive asset.

Shares in the Swedish fintech company have fallen 43.8% since its hotly anticipated IPO, accounting for 4.8p of the NAV deterioration.

CHRY’s holding in Klarna’s listed securities is subject to a lock up until 9 March, making progress slightly awkward for its three-year exit plan, settled on despite shareholder division in December. On this front, the board said it is taking advice from various advisers. 

The trust’s largest holding, Starling bank – at 53.3% of net assets –  hit a major milestone over the period with its digital banking platform Engine signing a ten-year contract with Tangerine Bank to re-platform its two million customers.

‘Not only is the scale of this agreement very material to Engine, but we view it as a strong endorsement of Engine’s offering,’ said managing partners Richard Watts and Nick Williamson. Smart Pension also secured a contract with Hargreaves Lansdown for its Keystone platform, designed for managing retirement savings.

Meanwhile, other top-five holding Wefox was marked down, reflecting the introduction of a funding uncertainty discount. 

CHRY trades on a 35% discount. In November, the board extended the current buyback deployment level until its general meeting in March and this month, returned approximately £108m to shareholders through buybacks, ahead of its £100m target.

Peel Hunt’s Anthony Leatham called the update a ‘setback’ for CHRY, which had reported a NAV per share increase of 21.5% for the year to the end of September. He added ‘all eyes’ will be on Starling and Smart Pension, representing just over 60% of CHRY’s NAV, as the managers put their realisation plan in action.