This story is available exclusively to Business Insider subscribers.
Become an Insider and start reading now.
- The Swedish fintech Klarna is Europe’s latest decacorn startup after raising $650 million at a $10.65 billion valuation.
- The company specializes in “buy now, pay later” credit for retailers and customers and operates across Europe and the US.
- The deal, led by Silver Lake and GIC, makes Klarna the fourth most valuable fintech and is likely its last private funding round before an IPO.
- Visit Business Insider’s homepage for more stories.
The pandemic doesn’t appear to have stemmed investors’ appetite for disruptive companies in the financial-services sector, with the Swedish startup Klarna becoming Europe’s latest decacorn.
Klarna, which was founded in 2005 and specializes in “buy now, pay later” retail, just raised $650 million at a $10.65 billion valuation from Silver Lake and GIC, Singapore’s sovereign wealth fund.
The deal is notable for bringing Klarna’s valuation above $10 billion, which makes it Europe’s most valuable private fintech company and the fourth most valuable worldwide. It’s expected to be the startup’s final private funding round before an initial public offering.
Klarna says it has 90 million customers worldwide with 12 million monthly active users on its app. Its service allows shoppers to pay for items in installments or in full at a later date.
Despite the company’s $59.8 million loss between January and June, it has piggybacked on positive retail sentiment amid the coronavirus pandemic.
A recent survey by the consultancy firm McKinsey found that of its respondents, more than 75% of consumers in the US have tried new brands, places to shop, or methods of shopping during the COVID-19 pandemic. Similarly, 82% of consumers in the survey who tried digital-shopping methods indicated that they would continue using them.
The US remains a core focus for Klarna, and it has focused much of its recent expansion there.
“We are at a true inflection point in both retail and finance,” Sebastian Siemiatkowski, Klarna’s cofounder and CEO, said. “The shift to online retail is now truly supercharged, and there is a very tangible change in the behaviour 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 has added more than 35,000 new retailers during the first half of 2020 to its network of more than 200,000 retail partners. The company’s existing investors include BlackRock, HMI Capital, Merian Chrysalis, TCV, Northzone and Bonnier, Sequoia Capital, Dragoneer, Permira, Commonwealth Bank of Australia, Bestseller Group, and Ant Group.