Time is a flat circle, and all that was once old is new again. For example, back in the venture days of yore, inside rounds were considered a poor market signal; if a startup could not attract a new lead investor for its next round, what did that say about the company?

Last year, that bit of conventional wisdom was inverted by abnormal market conditions and greed; inside rounds became a sign of strength as venture players doubled and at times tripled down on their portfolio companies, looking to get as much capital in the door as they could while the startup was still in its growth phase.

The Exchange explores startups, markets and money.

Read it every morning on TechCrunch+ or get The Exchange newsletter every Saturday.

And now we’ve returned to the prior state of affairs. Inside rounds are once again signs of things not going perfectly at companies that pursue them. Buy now, pay later outfit Klarna makes the point: The richly valued BNPL giant is looking to take on new capital from existing backers at a discount to its prior valuation. The Wall Street Journal reports:

The Sweden-based payments company is aiming to raise up to $1 billion from new and existing investors in a deal that could value it in the low $30-billion-range after the money is injected, the people said. That would represent a roughly 30% drop from the previous round.

No one likes a down round. They are dilutive, messy and demoralizing. But they are also miles better than not raising money and dying, so companies raise them when required.

Our question this morning is not whether it makes sense for Klarna to raise inside capital at a lower price. As the WSJ notes, the company tried to bump up its valuation slightly before changing course and pursuing a lower price. We know why Klarna is pursuing a down round: necessity. Instead, our question is whether the company is cutting its valuation enough to bring its worth in line with present market pricing.

Let’s find out.

Klarna, Affirm and the BNPL valuation revision

Thankfully for our needs, there are public BNPL players for us to observe as we work to better understand what the particular fintech revenue is worth. Affirm is public and other players that have BNPL services are also publicly traded.

Affirm, being effectively a pure BNPL play, and one that has some market overlap with Klarna, is a perfect floating comp for the Swedish company. And the U.S. company released its calendar Q1 2022 (Q3 fiscal 2022) results a little over a week ago. This means we have fresh-off-the-vine data from a public company.

To understand how well Klarna is repricing itself, let’s do a little bit of data collection and math. We start with the collection side of things (all periods calendar; data via the companies):