This year has seen a significant increase in consumers utilizing Buy Now Pay Later (BNPL) services while shopping from home during COVID-19. Swedish-based payments fintech Klarna is riding this wave to the top with a recent mega funding round that has placed it as the highest ranked fintech in Europe and fourth worldwide.
The latest funding round saw Klarna raise $650 million in equity, raising its valuation to $10.6 billion. The round was led by Silverlake, GIC, and accounts managed by BlackRock and HMI Capital. Merian Chrysalis, TCV, Northzone, and Bonnier are said to have acquired shares from existing shareholders. These investors stand alongside current backers such as Sequoia Capital, Dragoneer, Permira, the Commonwealth Bank of Australia, Bestseller Group, and Ant Group. Thanks to this funding round, Klarna has doubled its previous valuation of $5.5 billion from August 2019.
With over 90 million customers worldwide, Klarna offers a healthier, simpler, and smarter alternative to credit cards alongside a broad range of services aimed at making the shopping experience seamless. Klarna’s direct-to-consumer app allows users to shop at any store or brand online with the world’s first in-app option to make payments in installments attached to a loyalty program. The company is proving to anticipate and serve current consumer needs, which is demonstrated by its 12 million monthly app users and 55,000 daily downloads, outpacing direct competition with over three times as many downloads as its nearest competitor in the last year.
Other smart features setting the app apart from its counterparts include the ability to create smart wish lists, receive discount updates, configure price-drop notifications, and track spending and deliveries. Its loyalty program, Vibe, encourages consumers to make payments on time in an effort to cultivate responsible shopping by offering a point for every dollar paid back when due.
Klarna has shared that it will use the new funding to invest in growing its unique shopping platform and accelerating its global presence across all markets. The platform’s sights are particularly set on the U.S., where it now has more than 9 million customers. Klarna currently has 200,000 retail partners including ASOS, H&M, Amazon, Walmart, and Uber, and is working on expanding this portfolio at a reported 200 new partners a day.