Klarna is nearing a deal to raise new money at a valuation of around $6.5bn, according to people familiar with the matter, a humbling comedown and a testament to the punishing environment facing startup companies.

The Sweden-based speciality lending and online payments provider is negotiating to raise about $650m mostly from existing investors led by Sequoia Capital, the people said. Michael Moritz, who is the chairman of the well-known venture-capital firm, serves in the same role at Klarna.