Swedish payments disruptor Klarna has closed a $460m funding round — valuing it at $5.5bn, and bestowing the title of Europe’s most valuable private fintech firm.
The e-commerce specialist plans to use this fresh capital injection to continue its drive into the US market, where it says it currently attracts new customers at a rate of six million per year.
Dragoneer Investment Group, Commonwealth Bank of Australia and Merian Chrysalis were among the lead investors in the round, which follows on from an April fundraise that surpassed the company’s $100m target.
Klarna CEO and co-founder Sebastian Siemiatkowski said: “This is a decisive time in the history of retail banking.
“Finally, transparency, technology and creativity will serve the consumer, and there will be no more room for unimaginative products, non-transparent terms of use or lack of genuine care of one’s customers.
“We, all 2,500 of us at Klarna, are humbled and honoured, and now also further empowered, to play a role in this improvement of an industry for the benefit of the consumer, worldwide and in the US in particular.”
Latest Klarna funding will support expansion throughout the US
Klarna is a fully licensed bank that specialises in e-commerce payments, providing a system for shoppers and merchants that offers an alternative to traditional credit facilities and enables “buy now pay later” options for online transactions.
It has built up a strong business across Europe and is now concentrating its efforts on expanding its US presence.
Earlier in the year, Klarna announced that west coast rap icon Snoop Dogg had become a shareholder in the company, and would be the face of its ‘Get Smooth’ advertising campaign.
Klarna is now partnered with more than 3,000 merchants in the US, with a further 1,000 in the process of integration to the payments system.
Globally, Klarna serves more than 60 million customers, works with 130,000 merchants, makes one million transactions daily and is closing in on a $1bn annual revenue milestone.
Co-fund manager at Merian Chrysalis Richard Watts said: “Klarna has built a highly-impressive, digital payment ecosystem, trusted by both retailers and consumers.
“By simplifying and improving the flexibility of the payments process, retail partners working with Klarna have seen considerable improvement in customer engagement and sales.
“Klarna is one of Europe’s great fintech success stories and the company continues to develop truly innovative payment solutions.
“This latest funding round will enable the company to execute on its ambitious international growth plans.”
The participation of Commonwealth Bank of Australia in the funding round will also help the firm’s expansion into Australasian markets, thanks to an ‘exclusive partnership’ agreement with the region’s biggest lender.
E-commerce activity in Australia and New Zealand is an area of significant growth, and the partnership means Klarna will be well-positioned to take advantage of this trend.
