By Roger Baird on Tuesday 6 August 2019
The Swedish firm has landed backing worth$460m, which it says it will use to push into the US market.
Buy-now-pay-later platform Klarna has completed a massive funding round that values the firm at $5.5bn, ranking it as the largest private fintech in Europe and as one of the largest in the world.
The Swedish firm, founded in 2005, has landed $460m in funding, which it says it will use to boost its push into the US market.
The start-up provides delayed payment services to over 130,000 merchants around the world such as Ikea, Adidas and Zara. The firm claims 60 million customers around the world, employs 2,500 staff, and adds it is "in sight" of hitting $1bn in annual sales.
It said the funding was led by San Francisco-based investment group Dragoneer, which has been an early-stage investor in Uber, Airbnb and Spotify.
Klarna says it has deals with over 3,000 merchants in the US - including rue21, Asos, Lulus, Toms, Superdry and Sonos. It adds its American business is growing at an annual rate of six million consumers a year.
The Stockholm-based firm said that customers who use its Pay in 4 service – which offers shoppers the option of paying for goods in four equal payments with no interest or fees – spend 68 per cent more than retailer’s average order values.
Dragoneer founding partner Marc Stad, added: “Our strategy is to partner with a small number of disruptive, growth companies that are highly differentiated and run by world-class management teams. Sebastian and the Klarna team have built an exceptional payments business with a global footprint, operating in a huge addressable market with strong tailwinds.”
This funding round follows a cash call in May, when the fintech raised over $100m. It had raised a total of $775m prior to today's latest funding announcement, according to Crunchbase.
Klarna reported operating income last year of 161m Swedish crowns ($16.8m). Sales grew by a third in the first quarter, but the company made a loss of 96m crowns for the period due to higher net credit losses.
In January, US rapper Snoop Dogg also became a backer of Klarna and took on a role as its marketing “face”.