Klarna is closing in on a funding round that would see the BNPL giant's valuation slashed from $45.6 billion last year to just $6.5 billion, according to the Wall Street Journal.
Sweden's Klarna is working to raise about $650 million, most of it from existing investors led by Sequoia Capital, says the Journal, citing anonymous sources.
The valuation would represent a massive discount from last June's $639 million funding round, when the firm was riding the buy now, pay later wave.
In February, it was rumoured to be weighing a raise at a valuation of up to $60 billion.
However, it has since reported soaring operating losses of $748 million for the full year 2021 and outlined plans to lay off 10% of staff as it has faced up to a faltering economy and rising interest rates.
In May, Bloomberg reported that the company was planning to ask new and existing backers for as much as $1 billion in a deal that could put its post-money valuation in the low $30 billion range.
Just a month later, it appears to be settling for significantly less.