Klarna Branch

Swedish fintech company Klarna has announced plans to introduce randomised drug testing for its employees as part of a wider effort to bolster workplace security. The move comes as the company prepares for its initial public offering (IPO) in the United States.

According to Business Insider, Klarna informed employees of the new policy via an internal Slack message. The testing will be conducted by an external supplier to ensure compliance with local laws and industry standards.

Mikaela Mijatovic, Klarna's director of people and HR, described the initiative as 'part of a larger effort to strengthen security across Klarna'.

Bolstering Security Amid Growth

Klarna declined to comment further on the internal communication, but CEO Sebastian Siemiatkowski had previously proposed the idea during a September meeting.

Siemiatkowski explained that as Klarna grows as a financial institution, it has increasingly become a target for 'less favourable parts of society', such as hackers and cybercriminals.

The CEO also suggested implementing additional measures, including monitoring employees' locations and hiring dedicated security personnel. For senior and sensitive roles, safeguards could extend to reviewing financial statements to identify potential vulnerabilities.

'For more senior and more sensitive roles, this could also include things like understanding your financial statements to understand if someone is in trouble or could be potentially compromised,' Siemiatkowski said.

The Prevalence of Drug Testing in Sweden

Random drug testing is relatively common in Sweden, especially in the private sector. Nafsika Karavida, an attorney with Reavis Page Jump, stated that the practice is permitted under Swedish law and is increasingly widespread in the fintech and banking industries.

A 2022 study revealed a rise in illicit drug use in Swedish workplaces over the past 25 years. In 2019, 5.6% of samples tested positive for drugs, compared to just 1.3% in 1994. Cannabis usage showed consistent growth, while positive tests for benzodiazepines declined. Between 2013 and 2019, there was also a notable increase in positive results for amphetamines and cocaine.

Klarna's Journey to IPO

Founded in 2005 by Sebastian Siemiatkowski, Niklas Adalberth, and Victor Jacobsson, Klarna has grown to become a leader in the buy-now, pay-later sector. Earlier this year, the company submitted draft registration documents to the U.S. Securities and Exchange Commission (SEC) as part of its IPO plans.

The timing of the IPO will depend on market conditions, with the company yet to disclose the number of shares to be offered or the price range.

Klarna's valuation peaked at £36.2 billion ($45.6 billion) in 2021 following significant fundraising rounds, including £600 million ($731 million) in March and £480 million ($583 million) in June of that year. However, its valuation fell to £5.3 billion ($6.7 billion) in 2022 amid a wider downturn in the startup sector.

Building a Secure Workplace Culture

By introducing drug testing, Klarna aims to deter substance abuse and address potential issues proactively. These measures are intended to protect employees' well-being, ensure regulatory compliance, and uphold industry standards.

When carried out respectfully and transparently, randomised drug testing can reinforce trust, accountability, and a commitment to fostering a workplace culture prioritising health, safety, and performance.

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