Stockholm based fintech company Klarna has raised US$ 650M in a mega-round of funding on 15 September 2020. This has raised Klarna’s valuation to US$ 10.65M making it the highest-valued private fintech company in Europe.
The funding round was led by Silver Lake. Other participants included GIC (Singapore’s sovereign wealth fund), Merian Chrysalis, TCV, Northzone and Bonnier, BlackRock and HMI Capital. Till now, Klarna has raised US$ 2.1B. It is now looking forward to an initial public offering even after its latest funding round left it roughly twice as valuable as it was last year.
About Klarna
Klarna is Swedish payment provider for online shoppers. It was founded in 2005 by Niklas Adalberth, Sebastian Siemiatkowski, Victor Jacobsson. It provides an alternative payment method on e-commerce platforms and lets you buy now and pay later over 3-4 instalments with an interest rate of 0%. The company generates revenue from transaction fees as well as late fees. Merchants get paid right after the initial transaction.
Recently, Klarna also expanded into US and has already over 9 million customers. With the help of Klarna App, people can see their payments, access marketplace of stores, track deliveries etc. The company claims that the app has 12 million monthly active users and 55,000 daily downloads.
They also launched a rewards program in 2020 called Vibe which is currently available in the US only. Vibe lets you earn one point for every pay back on time using Klarna as payment method. These points can also be exchanged for gift cards at H&M, Amazon, Walmart, Uber etc.
Klarna is working with around 200,000 retail partners like Sephora, Groupon and Ralph Lauren. During the first half of 2020, Klarna reported US$ 466M in revenue and US$ 59.8M losses.
“Over time, with the number of shareholders we have, it’s probably going to be the natural evolution,” Chief Executive Officer Sebastian Siemiatkowski.
Klarna claims that the demand for its services from both retailers and consumers has increased during the pandemic. It also claims that it has added around 200 new retailers per day in the first half of the year and has set aside a reserve of cash to act as a buffer given the current economic scenario.
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