Sweden’s “buy now and pay later” payments firm Klarna said on Tuesday it has raised $650 million of equity from investors led by Silver Lake — a move that raises its valuation to $10.65 billion.
Klarna said it now ranks as “the highest-valued private fintech in Europe and now the 4th highest worldwide” ahead of a probable IPO in the United States in the next two years.
Klarna said its “volume and revenue” for the first half of 2020 grew 44% and 36% year-on-year to more than $22 billion and $466 million respectively.
“The funding round is led by Silver Lake, the global leader in technology investing … alongside GIC — Singapore’s sovereign wealth fund — as well as funds and accounts managed by BlackRock and HMI Capital,” said Klarna.
“Concurrently, Merian Chrysalis, TCV, Northzone and Bonnier have acquired shares from existing shareholders.
“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.
“The funding will help Klarna further invest in its unique shopping offering, continue to grow its global presence, and accelerate its strong momentum across all markets, especially in the US where the company is growing particularly rapidly and now has more than nine million consumers.
“The uniqueness of Klarna’s offer — providing a healthier, simpler and smarter alternative to credit cards and a broad range of services to enable a superior shopping journey — continues to drive rapid consumer adoption and loyalty with more than 90 million consumers worldwide.
“This is at a time when consumers are actively turning away from revolving credit lines and inferior retail experiences towards services that better meet their needs.”
Klarna said its direct to consumer app, which enables users to shop at any store or brand online with installment payment options, is “strongly resonating” as consumers have become more focused on “convenience, value and control.”
It said its app has more than 12 million monthly active users worldwide, with 55,000 daily downloads, “significantly outpacing its nearest competitor with almost 3x as many downloads over the last year.”
Klarna co-founder and CEO Sebastian Siemiatkowski said: “We are 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 behaviour of consumers who are now actively seeking services which offer convenience, flexibility and control in how they pay and an overall superior shopping experience.
“Klarna’s unique proposition, consumer preference and global retailer network will prove an excellent platform for further growth.
“The Klarna team is honoured to welcome such world class investors to support our mission to become the world’s favourite way to shop.”
Egon Durban, co-CEO and managing partner, and Jonathan Durham, managing director, of Silver Lake: “Klarna is one of the most disruptive and promising fintech companies in the world, redefining the ecommerce experience for millions of consumers and global retailers, just as ecommerce growth is accelerating worldwide and rapidly shifting to mobile.
“Klarna’s retail partners benefit from incremental traffic and dramatically improved customer conversion.
“Consumers love Klarna for its differentiated app-based shopping experience and for their flexible and transparent payment options.
“We are excited to invest in the company and partner with Sebastian and his talented team at this dynamic time to help accelerate Klarna’s remarkable growth and success worldwide.”
Numis acted as exclusive financial advisor and placement agent to Klarna.