As the buy-now, pay-later (BNPL) craze explodes, some fintechs are in just the right place to catch the sparks. Payment services company Klarna is one of these players, and it has just landed $650 million in funding.
Today’s round adds to the company’s $1.4 billion in previously raised funds, bringing its total to just over $2 billion. The investment also boosts Klarna’s valuation to $10.6 billion, ranking the company as the highest-valued private fintech in Europe and the fourth highest worldwide.
The round was led by Silver Lake, GIC (Singapore’s sovereign wealth fund), and accounts managed by BlackRock and HMI Capital. Additional funds came from Merian Chrysalis, TCV, Northzone, and Bonnier, which have acquired shares from existing shareholders.
Klarna will use the funds to invest in product development, fuel global expansion, and build on its growth.
“We are at a true inflection point in both retail and finance,” said Klarna CEO and Co-founder Sebastian Siemiatkowski. “The shift to online retail is now truly supercharged and there is a very tangible change in the behavior of consumers who are now actively seeking services which offer convenience, flexibility and control in how they pay and an overall superior shopping experience. Klarna’s unique proposition, consumer preference and global retailer network will prove an excellent platform for further growth.”
As consumers seek alternative methods to finance their purchases, Klarna’s BNPL tool that enables users to pay in interest-free installments has gained impressive traction. The company’s shopping app has more than 12 million monthly active users worldwide, with 55,000 daily downloads.
And Klarna’s game is also strong on the merchant side of things, as many retailers have sought to increase online sales during stay-at-home orders. During the first half of 2020, the company added more than 35,000 new retailers to its existing merchant base of more than 200,000 partners including Sephora, The North Face, Timberland, and Ralph Lauren.
As a result of this growth, the company’s volume grew 44% over the first half of this year to more than $22 billion and its revenue increased 36% year-on-year to $466 million over the same period.