Buy Now Pay Later Pays Off Big for Klarna

Klarna, a Swedish upstart bank and “buy now, pay later” (“BNPL”) platform raised $1 billion in new funding recently, putting their current valuation at $31 billion. This valuation makes the company the highest-valued private fintech company in Europe and one to watch.

As recently reported in Tech Crunch, the round was said to be four times oversubscribed, likely due to reports that the company is looking to pursue a public listing in the future. Affirm, a US competitor, recently completed an initial public offering.

Klarna is one of a few BNPL companies (other notable competitors include Affirm and AfterPay), allowing customers to skirt up front payment at checkout without reliance on credit cards.

Klarna offers retailer integrations, appearing as an option at checkout on a retailer’s platform, as well as its own shopping app, where users can easily access stores that allow customers to pay with Klarna. Partners include H&M, Nike, Ikea, Macy’s, ASOS, Peloton and others, with Klarna currently active in over 17 countries. What began as an invoicing company now looks to be a European tech darling with growth spurred by the rise of online shopping and the offer of a creative alternative to traditional banking. The company is also taking aim at the American market and is setting its sights on offering users broader banking services such as savings and current accounts.

Author: Emma Baumann, 2020/2021 Articling Student-at-law