Klarna Valued At $10.65B After $650M Funding Round
Sweden-based Klarna, which provides the ability to pay for consumer goods with installments at a number of retailers, has seen a boost during the pandemic.
The investment will value the company at $10.65 billion, a sizable increase from the company’s last valuation of $5.5 billion in 2019. The investment will propel the company to become Europe’s highest-valued private FinTech company, WSJ reported.
Silver Lake will be putting in $500 billion of the total, according to WSJ sources.
Klarna boasts over $1 billion in annual sales and over 3,500 global employees. The company is a regulated bank in Europe and lets customers explore a method where they pay for items in three- or four-part installments. There’s a “try before you buy” feature in which customers aren’t charged for the item for 30 days, but the company still pays the merchant up front. The app, according to WSJ, is like “a virtual department store.”
Silver Lake has been an especially prolific investor during the pandemic. The firm announced a $1 billion investment in Indian eCommerce giant Reliance Retail earlier this month, and in April, the company joined with Sixth Street Partners for a $1 billion investment in Airbnb, which at the time was weathering a storm of pandemic-related cancellations.
Klarna’s success is related to the overall booming popularity of the BNPL model, which has seen a resounding surge in recent years, PYMNTS reported. The form has become popular during the pandemic because of the economic downturn around the world, leaving many people to tighten their belts amid global uncertainty.
Klarna CEO Sebastian Siemiatkowski said the new popularity is proof that consumers are still looking for the best value, alongside convenience and inspiration, showing that online shopping is now more than just a transaction.