Klarna is already the most expensive private fintech company in Europe and fourth in the world, CNBC reports. The Swedish online payment company raised $ 650 million, valued at $ 10.6 billion. The round was led by Silver Lake Partners, along with GIC, Singapore’s sovereign wealth fund, as well as BlackRock and HMI Capital.
Klarna, with a full banking license, is best known for its “buy now, pay later” model, which offers consumers interest-free retail financing. Klarna pays the merchant when the user buys something through the platform, and later the buyer pays in equal monthly installments.
Fintech benefits from a fee it receives from the merchant, as well as from interest and fees if consumers delay payments.
The company competes with the American Affirm, led by PayPal co-founder Max Levchin, and the Australian Afterpay. Last month, the latter reached a deal to acquire Spain’s Pagantis, which will allow it to set foot on the Old Continent.
Klarna currently has over 12 million active users worldwide. The Swedish company also reported significant growth in the United States, adding 35,000 retailers in the first half of the year. Their total number is now over 200 thousand, including names such as Sephora, Groupon and Ralph Lauren.
A recent study by McKinsey & Company shows that over 75% of consumers have tried new brands, places or shopping methods during the pandemic. 82% of those who have tried new digital shopping methods will continue to use them after the end of the pandemic.
For Klarna, this brought volume and revenue growth of 44% in the first half of 2020 and 36% on an annual basis to over $ 22 billion and $ 466 million respectively. For now, growth does not mean profit. Klarna reports a 7-fold increase in loss in the first half of $ 59.8 million.
The fintech for cross-border payments TransferWise received an estimate of $ 5 billion.
Thus, the company again ranks among the most expensive European startups