Klarna has raised $650 million in its most recent funding round, which has a “post-money valuation” pegged at more than $10.6 billion — thrusting the company to the top of the most highly valued fintech companies in Europe.
One year ago, fintech analysts had Klarna valued at $5.5 billion, and CB Insights had listed the company as among the top unicorns in the POS and consumer lending segment.
Klarna said in a statement that the funding round will help it further invest “in its unique shopping offering” while continuing to grow its “global presence, and accelerate its strong momentum across all markets, especially in the U.S. where the company is growing particularly rapidly and now has more than 9 million consumers.”
Klarna said it has recently seen a surge in demand, “adding more than 35,000 new retailers during the first half of 2020” alone — thereby bringing the total number of brands and retail partners to more than 200,000. This includes brands such as The North Face, Ted Baker, Ralph Lauren and Sephora, among others.
This round of funding was led by Silver Lake along with GIC (Singapore’s sovereign wealth fund) and funding from BlackRock and HMI Capital. Klarna said in a statement that, concurrently, “Merian Chrysalis, TCV, Northzone and Bonnier have acquired shares from existing shareholders,” and said they will join “current investors such as Sequoia Capital, Dragoneer, Permira, Commonwealth Bank of Australia, Bestseller Group and Ant Group in supporting Klarna’s future growth.”
Sebastian Siemiatkowski, cofounder and chief executive officer of Klarna, said the company is at a “true inflection point in both retail and finance. 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 that offer convenience, flexibility and control in how they pay and an overall superior shopping experience.”
The ceo said Klarna’s “unique proposition, consumer preference and global retailer network will prove an excellent platform for further growth.” The fintech model has proven attractive to multiple consumer demographic cohorts and is backed up by consumer spending data from the company.
Siemiatkowski recently told WWD that its buy now, pay later model “has fortunately enabled cross-generation usage of online shopping and payments. Kids are not the only ones getting a wardrobe refresh before the school year begins. We saw a 24 percent increase in the family clothing category from the last week of July to the first week of August, with Boomers and Gen Xers contributing in large part to the overall increase.”
The ceo noted that Baby Boomers “accounted for the highest percentage of the uptick in clothing and apparel sales during this time frame.” Klarna expects this momentum to continue through the holidays.
In the statement today, Klarna said its payment solution offers “a healthier, simpler and smarter alternative to credit cards and a broad range of services to enable a superior shopping journey.” Klarna has more than 90 million consumers worldwide (with 12 million-plus monthly active users of its app), and the company described current business conditions as a time “when consumers are actively turning away from revolving credit lines and inferior retail experiences towards services that better meet their needs.”
With the app, users can also now “wish list their favorite items, access unique discounts, set up price-drop notifications and track spending and deliveries intelligently,” the company said, adding that the app also features “the world’s first buy now, pay later shopper loyalty program, Vibe, which rewards consumers who pay on time, to encourage responsible spending.”