Klarna from Sweden becomes Europe’s largest private fintech with €410M round

Klarna from Sweden becomes Europe’s largest private fintech with €410M round

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A good payment gateway is a must if you run a business or just thinking of a startup that deals with an online marketplace or any product that interacts with the user. At present, there are numerous payment gateways exist on the market, and startup founders often struggle to choose the best one.

Based out of Stockholm, Klarna provides e-commerce payment solutions for merchants and shoppers, and it’s ‘unique’. It offers consumers the option to pay now, pay later or over time – offering a simple, safe, and smooth checkout experience. The platform has become a notable disruptor in the payments sector, which is marketed as an alternative to credit cards.

Largest private Fintech in Europe!

Klarna, the Swedish payments company has raised $460 million (approx €410 million) in an equity funding round, at a post-money valuation of $5.5 billion. Post the new estimate, Klarna becomes the largest private Fintech in Europe and one of the largest private Fintech’s globally.

Sebastian Siemiatkowski, co-founder and CEO of Klarna:

This is a decisive time in the history of retail banking. Finally, transparency, technology, and creativity will serve the consumer, and there will be no more room for unimaginative products, non-transparent terms of use or lack of genuine care of one’s customers. We, all 2500 of us at Klarna, are humbled and honored, and now also further empowered, to play a role in this improvement of an industry for the benefit of the consumer, worldwide and in the US in particular.

The funding round was led by Silicon Valley-based Dragoneer Investment Group alongside others including Commonwealth Bank of Australia, HMI Capital, and funds and accounts managed by BlackRock. This investment follows funding round in April of this year that closed above the company’s $100 million targets, driven by strong demand from Klarna’s existing investor base.

Targeting the US market!

The Swedish payments company will utilise this fund to accelerate its growth in the US market, where it is currently growing at an annual rate of 6 million new US consumers. It was founded by Niklas Adalberth, Sebastian Siemiatkowski, Victor Jacobsson in 2005.

What makes Klarna unique?

This platform offers direct payments, pay after delivery options, and installment plans in a smooth one-click purchase experience that lets consumers pay when and how they prefer to. This global tech bank is on a mission to make payments and shopping as smooth as possible.

Powering 3000 merchants in the US!

Right now, the Stockholm headquartered company is powering over 3000 merchants in the US including rue21, ASOS, Lulus, Toms, Superdry, Sonos and Acne Studios and helping them increase new consumer acquisition, average order value, and retention.

Furthermore, merchants who are offering ‘Pay in 4’ reporting a 68% increase in average order value, a 44% increase in conversion compared to cards, and a 21% higher purchase frequency. Notably, Klarna was launched in the US four years back.

Brands like H&M and Abercrombie& & Fitch are also about to go live with Klarna, which is now processing over a million transactions each day. As per the company claims, July witnessed a record number of new merchants signed with Klarna in the US.

Footprint continues to grow!

The payment solution company is now serving over 60 million consumers, 130,000 merchants partners, 1 million transactions daily and is in sight of a $1 billion annual revenue. Also, it employs 2,500 employees and is active in 14 countries.

Some important merchants!

H&M, Adidas, IKEA, Expedia Group, ASOS, Pelotan, Abercrombie & Fitch, Michael Kors, Nike, AliExpress, Superdry, Sephora, Spotify, Wayfair, Gymshark, Samsung, Zara, Topshop, The Hut Group, Steve Madden, Boozt, Daniel Wellington, Bugaboo, Rue21, TOMS, Sonos, Agent Provocateur, Lufthansa, ETSY, ACNE Studios, Daniel Wellington, KLM, Turkish Airlines and many more.

Stay tuned to Silicon Canals for more updates in the tech startup world.

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