Swedish startup Klarna’s $639 million funding round is the largest in the history of the startup (not sure if this was the largest in the history of the startup industry, but probably), and the largest ever for a European fintech company. It also made the company the fourth European startup to reach a billion dollars in valuation. The funding was led by new investor SoftBank and existing investors Tiger Global, Wellington Management and Revolution Growth.
Sweden’s Klarna, the $6.5 billion revenue grocery company, has raised $639 million in a new funding round, taking its valuation to $3.5 billion. The money will be used to expand the company’s customer base, which is now in 70-plus countries, and to accelerate the development of its digital bank, where Klarna will offer a digital wallet and payment services.
Klarna, a Swedish e-commerce company with over $4 billion in annual revenue, has raised $639 million in its latest funding round. The round brings the company’s total funding to $1.8 billion, and comes after a 2015 funding round that valued the company at $2 billion. The company has used its funding to expand its business in other European markets outside of Sweden, where it operates as an online marketplace for physical and digital goods.Klarna, the Swedish fintech giant specializing in buy now, pay later technology, announced today that it has received $639 million in funding. The funding round was led by SoftBank’s Vision Fund 2 and also included well-known companies like Silver Lake, China’s Ant Group, H&M and Sequoia Capital. The latest round of funding brought Klarna’s valuation to $45.6 billion. This is a significant jump from an estimate of $31 billion in March 2021 and $11 billion in September last year. This ranking confirms that Klarna is the most valuable private fintech company in the world after Stripe.
Alternative to credit card
Klarna offers customers of major retailers like H&M and Sephora the opportunity to buy now and pay later. This service allows customers to split their purchases into four equal payments. Customers receive a one-time card for these purchases. Each time you create a one-time use card with Klarna, you will receive a unique card number that you can use at checkout, just like a regular credit card. Each single-use card then follows a selected payment plan that can be paid for and managed through the website or mobile app. It can be linked to your credit or debit card. The biggest advantage of these single-use cards is the ability to make automatic payments on fixed dates. According to Klarna data, 44% of shoppers would abandon a purchase if there were no four payment options, and 45% of shoppers would spend more per order if a payment plan was available. In exchange for this service, Klarna charges merchants a fee for each transaction. The company is very successful in Europe, where it has 87 million active users and annual revenues of $1.2 billion in 2020. Klarna dominates the market for immediate payments and deferred purchases in Europe, but its main competitors in other regions are Australia’s Afterpay and US fintech company Affirm.
With this latest round of funding, the company plans to aggressively expand globally, especially in the United States. By the end of 2020, the company had 14 million users in the US, with 60,000 average daily downloads by December 2020. The company noted that there is overuse of credit cards in the United States and believes that millennials have a desire for such technology. Another advantage the company sees in the United States is a more flexible regulatory system. In the UK, the company has come under strict regulatory scrutiny following the UK Treasury’s decision in February to transfer oversight of the buy now, pay later sector to the Financial Conduct Authority (FCA). The company was recently considering a future IPO on the London Stock Exchange, but the increased focus on expansion in the US may lead it to consider US exchanges as well.Klarna, a Swedish ecommerce company, has raised €639 million from an investment round that saw participation from existing investors, including Swedish investment vehicle Industrifonden. The five-year-old company will use the funds for continued investment in its digital businesses. Klarna, which has over 8 million customers, has grown rapidly since its founding in 2005 with a focus on customer loyalty. The company currently has a base of 10 million customers who have made over one billion purchases through the platform.. Read more about when is klarna going public and let us know what you think.
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