Klarna said to be raising $1bn at $31bn valuation

By Daniel Lanyon on Wednesday 24 February 2021

Digital Banking

Rumours of a big round of new fundraising, which comes just six months after its last $650m, have circulated in recent days for Klarna which is currently under greater scrutiny in the UK.

Klarna said to be raising $1bn at $31bn valuation
Image source: Klarna

 Klarna will look to raise up $1bn at $31bn, tripling the company’s valuation after its most recent round in September 2020 ($10.6bn). 

The buy-now-pay-later company, as reported by Bloomberg, will see the huge cash injection from existing investors, ahead of a rumoured potential public listing next year. The valuation would make Klarna Europe's most valuable fintech, a crown it has held before but was recently surpassed by Checkout.com which raised at a $15bn valuation in January.

A $31bn valuation for Klarna would represent a huge increase in European fintech’s market size with the firm at roughly the same current valuation as Stripe and more than Revolut, Monzo, Starling Bank and N26 combined. 

Analysts at Liberum estimate, however,  the broader BNPL peer group is currently trading on c.25x revenues estimated for 2021, this compares to c.7x for Klarna based on the previous $10.7bn valuation.

Therefore a c.21x Klarna's forecast 2021 revenues, closer to listed peers such as Afterpay and Affirm.

“We estimate that Klarna's revenues were almost twice as high as its buy-now-pay-later peers Afterpay (Australian listed) and Affirm (US listed) in 2020,” Liberum said.

Klarna offered a hint of its product roadmap a few weeks back with the launch of bank accounts in Germany. 

The BNPL market in the UK is worth at present about £2.7bn where five million use it.

Sign up for our newsletters

Your daily 7am download of all things alternative finance and fintech.

Fintech and alternative finance headlines with an exclusive Editor's Note each week. Delivered Monday at midday.

AltFi's new weekly US newsletter breaking down the ins and outs of America's burgeoning fintech sector. Delivered Monday 9am EST/ 6am PST.