Record $5.5bn Klarna valuation a ‘decisive time in the history of retail banking’

7 Aug 2019672 Views

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Klarna is stamping its name on the global fintech scene, reaching a valuation of $5.5bn after its latest major round of funding.

When the Swedish fintech start-up Klarna was featured on Siliconrepublic.com’s 2018 list of the hottest fintechs of Europe, it was valued at $2.25bn. Now, following its latest round of funding, this has more than doubled to $5.5bn, making it the continent’s most valuable fintech start-up.

In a statement, the company said it has raised $460m from a group of investors led by the Silicon Valley-based Dragoneer, as well as BlackRock and the Commonwealth Bank of Australia. In addition to being the largest private fintech in Europe, the start-up is now the sixth largest in the world.

The Stockholm company has brought the ‘shop now, pay later’ model to the mainstream, with shoppers being given the option of buying goods to pay off after 30 days or paying in instalments over a series of months.

Dragoneer founding partner Marc Stad said that Klarna was an “exceptional” payments business in a market with “strong tailwinds”. Meanwhile, Klarna’s CEO and co-founder Sebastian Siemiatkowski described the deal as “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,” he said.

“We, all 2,500 of us at Klarna, are humbled and honoured 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.”

Klarna is now providing payment solutions for 60m consumers in 14 countries. The firm has partnered with 130,000 merchants including Adidas, Samsung, Ikea, H&M and Abercrombie & Fitch.

This funding round comes just a few months after it received $100m from investors that included none other than Snoop Dogg, as well as renowned venture capital firm Sequoia Capital.

Colm Gorey is a senior journalist with Siliconrepublic.com

editorial@siliconrepublic.com