Sebastian Siemiatkowski. Image: Klarna
The ‘buy now, pay later’ company is ramping up expansion and growth again with cash from Japan’s SoftBank.
Klarna is now valued at $45.6bn after another major injection of capital, this time from SoftBank.
The ‘buy now, pay later’ start-up has raised a further $639m in funding led by SoftBank’s Vision Fund 2, with Adit Ventures, Honeycomb Asset Management and WestCap Group also taking part.
The round comes just a few months after Klarna raised $1bn. The hefty valuation means the Swedish fintech retains its position as Europe’s most valuable privately held fintech company and second in the world after Stripe.
Klarna said this latest investment is to support further internationalisation. It is the biggest buy now, pay later operator – where customers get credit on purchases in retail to be repaid in stages, interest free – in Europe and is pushing further into the US market.
According to the company, it has 18m customers and 250,000 retailers using its services. It generates revenue from fees charged to the merchants. It reported more than $18.9bn in gross merchandise value in the first quarter of this year.
“Consumers continue to reject interest and fee-laden revolving credit and are moving toward debit while simultaneously seeking retail experiences that better meet their needs,” Klarna chief executive Sebastian Siemiatkowski said.
“Klarna’s more transparent and convenient alternatives align with evolving global consumer preferences and drive worldwide growth. I’m very proud of the investors who are supporting Klarna’s ambition to challenge these outdated models to empower consumers with fair, transparent and convenient products to help them bank, shop and pay each day.”
The Swedish company is a regulated bank but it and its rivals face a growing tide of scrutiny from regulators, particularly in the UK.
“Klarna’s growth is founded on a deep understanding of how the purchasing behaviours of consumers are changing, an evolution which we believe is accelerating,” Yanni Pipilis, managing partner for SoftBank Investment Advisers, said.
“Klarna has already successfully expanded into the US and we are excited to continue supporting the team in bringing the next generation of financial services to new markets worldwide.”
