Swedish online payments firm Klarna has raised $650 million in an equity funding round, valuing the company at $10.6 billion. The round was led by Silver Lake Partners, alongside GIC, Singapore’s sovereign wealth fund, as well as BlackRock and HMI Capital. Klarna is one of the most disruptive and promising fintech companies in the world, redefining the ecommerce experience for millions of consumers and global retailers, just as ecommerce growth is accelerating worldwide and rapidly shifting to mobile.
Klarna is mostly known for its “buy now, pay later” model that offers shoppers interest-free financing on retail purchases over a period of installments. Klarna pays a merchant once a customer buys something using its platform, while users are later invoiced over a number of installments. Its regional competitors include British banking app Revolut and payments software maker Checkout.com.
Klarna is experiencing rapid U.S. growth as the country continues to feel the effects of the Covid-19 pandemic. As a result of the accelerated switch to online retail and evolving consumer preferences, the company has added more than 35,000 new retailers during the first half of 2020 to its network of more than 200,000 retail partners, including Sephora, Groupon and Ralph Lauren. The latest investor fundraising not only makes it the highest-valued private fintech company in Europe, but also the fourth-highest valued private fintech company worldwide.