The funding round makes the Swedish player the most valuable fintech company in Europe with a $31bn valuation.
Klarna, the Swedish fintech company, has raised $1bn in funding that values the ‘buy now, pay later’ outfit at $31bn.
The round makes Klarna Europe’s most valuable privately held fintech company as it expands beyond providing credit for shopping and into broader digital banking and payment services.
The Stockholm-based company did not disclose the names of the investors in the bumper round – which has been much rumoured for some time – but said it was a mix of new and existing backers and claimed that the round was four times oversubscribed.
“At Klarna, we solve problems – that is the heart of what we do for both consumers and retailers. Consumers want transparent products to help them bank, shop and pay that reflect the way they live their lives, not just outdated traditional models,” chief executive Sebastian Siemiatkowski said in a statement.
He added that the company will be pledging 1pc of the money raised in this round to sustainability initiatives.
He said that the fintech industry “has a responsibility to help in some way solve global sustainability issues and I hope others will join Klarna in our ambition”.
US retailer Macy’s and Chinese tech giant Ant are among Klarna’s previous backers.
Fintech companies have been ballooning in value over the last year after several companies in the payments and digital banking spaces raised large rounds of funding, including Revolut and Stripe.
For Klarna, it has benefitted from a surge in popularity in online shopping and the option to buy now and pay later. It allows shoppers to split up payments for a purchase over short instalments. While Klarna is one of the biggest players, it is a fiercely competitive area. Its US rival Affirm floated on the Nasdaq in January and now has a market cap of $23bn.
At the same time, buy now, pay later has attracted much scrutiny over the ease with which shoppers can amass debt through online shopping. The UK recently introduced plans for new regulations overseeing these payment providers.