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Sequoia Capital has aborted an attempt to oust its former partner Michael Moritz from the board of Klarna, days after the Silicon Valley venture capital firm launched an extraordinary bid to unseat him as chair of the “buy now, pay later” company.
Matthew Miller, the Sequoia partner who joined Klarna’s board at the start of the year and who initiated the move against Moritz, will instead leave his post.
The attempt to remove Moritz as chair last week was backed by Sequoia managing partner Roelof Botha, according to people with knowledge of the decision, and was “about board composition to set the company up for its next chapter”, a spokesperson for Sequoia said last week.
But the firm had not fully understood the situation when it launched an effort to remove Moritz, a person with knowledge of Sequoia’s thinking said on Tuesday.
“Upon a fuller assessment, we’ve withdrawn our [emergency general meeting] request. We fully support Michael as chairman of Klarna, and as we have already stated, we’re excited to continue to back [Klarna chief executive] Sebastian [Siemiatkowski] and Klarna on their path to IPO and beyond,” Sequoia said in a statement.
Miller’s shock move against Moritz — who left Sequoia in 2023 after a near-40 year career in which he had led its investments into Google, PayPal and Klarna — had threatened to open a boardroom schism as the $6.7bn fintech prepares for a long-awaited initial public offering.
The U-turn leaves a vacant seat on Klarna’s board and questions over what originally motivated the company’s largest shareholder to act against its chair.
“The bottom line is Mike Moritz has been iconic in Silicon Valley for 20 years. He’s been invaluable in mentoring people at Klarna. He’s been a very good source of stability and wisdom at Klarna,” said Eric Munson, chief investment officer at venture firm Adit Ventures, another shareholder in the company.
Botha announced the dramatic reversal of course in a letter to Klarna shareholders on Tuesday, according to a person with knowledge of its contents.
Miller has been a Sequoia partner since 2012, recently moving to London to spearhead the firm’s expansion in Europe. Sequoia, along with the rest of Klarna board and Siemiatkowski, will now have to chose Miller’s successor.
Moritz left Sequoia last year, committing to “smoothly transition” off the boards of companies the firm had invested in over time. He relinquished his Sequoia-affiliated board seat at Klarna to Miller at the start of this year, but was asked to remain in an independent capacity.
Klarna, founded in 2005, soared to a valuation of almost $46bn in 2021, becoming Europe’s most valuable start-up at the peak of a frenzy in venture investing. A year later its valuation was slashed to about $7bn when it raised $800mn from investors.
Siemiatkowski has repeatedly spoken about his intention to take the company public and Klarna has been laying the ground for an IPO for the past year, according to a person with knowledge of the situation.
Klarna declined to comment. Sequoia’s decision to drop its effort to oust Moritz was first reported by The Information.
Additional reporting by Akila Quinio in London
