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BNPL Klarna Secures $639million in Funding To Support International Expansion

Klarna, a global payments provider, retail bank, and shopping service, has confirmed a new equity funding of $639 million. The round was led by SoftBank’s Vision Fund 2,with additional participation from existing investors Adit Ventures, Honeycomb Asset Management and WestCap Group, to support international expansion and further capture global retail growth. 

The post-money valuation of Klarna is $45.6 billion and remains the highest-valued private fintech in Europe and the second-highest worldwide. As part of the GiveOne initiative established by Klarna earlier this year, 1% of this equity raised will be directed to initiatives supporting planet health.

Klarna enables consumers to shop, pay and bank in a smarter way, designed to fit the lives they lead, rather than the requirements of the traditional payments and banking industry. The ongoing structural shift of consumers turning away from revolving credit lines where they incur interest or fees to debit and simultaneously seeking superior retail experiences means Klarna’s healthier, more transparent and convenient alternatives, which put consumers in control are closely aligned to evolving global consumer preferences and drive global growth.

Sebastian Siemiatkowski, Klarna Founder and CEO said: “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’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 I’m very proud of the investors who are supporting Klarna’s ambition to challenge these outdated models to empower consumers with fair, transparent, and convenient products to help them bank, shop and pay each day.”

Yanni Pipilis, managing partner for SoftBank Investment Advisers said, “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. 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.”

Klarna is available direct to consumers via the company’s shopping app, used by 18million customers worldwide as well as at over 250,000 retailers globally. In the app, consumers can browse and shop at any brand online with Klarna payment options, allowing them to pay immediately or later, manage spending and available balances, add favourite items to collections, initiate refunds, access tailored discounts, receive price-drop notifications, track deliveries intelligently and join Klarna’s loyalty program, Vibe.

Charlie Young, partner at WestCap commented: “Klarna is leading a revolution in consumer preference, and has already reimagined the payments, e-commerce, and banking experience for tens of millions of people. Klarna’s global scale and leading market position create even more opportunity for the business going forward. WestCap is pleased to partner with Klarna at this exciting moment in the company’s history.”

Klarna’s Q1 2021 results evidence how such services are resonating with consumers, recording over $18.9billion GMV (Q1 2020: $9.9billion) for the period driven by growth in all markets and exceptional momentum in the US with over 18 million American consumers now using Klarna. In 2020, the Klarna app consistently ranked among the Top 10 app downloads in the US and this momentum continues as downloads in 2021 have increased 125% year on year, propelling record volumes in March 2021. Klarna is now live with 24 of the top 100 US retailers, more than any of its competitors, illustrating our position as the global shopping partner of choice. Equally, Klarna’s global footprint across 17 markets continues to grow, with a number of new markets launching in 2021, soon to be the largest e-commerce market in Europe worth over $185billion by 2024.

This funding round provides GiveOne, the initiative to support planet health established by Klarna earlier this year, with its third significant donation since launch. Recent investor A$AP Rocky pledged to support the Miti Alliance in Kenya and its founder Michael Waiyaki, who is fighting to slow down the effects of climate change due to deforestation. Klarna has also launched a CO2 tracker on every purchase. In one of the largest-ever awareness-raising efforts on carbon footprints, 90 million Klarna consumers across all markets are now provided with the kgCO2 value on every purchase.

Author

  • Polly is a journalist, content creator and general opinion holder from North Wales. She has written for a number of publications, usually hovering around the topics of fintech, tech, lifestyle and body positivity.

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