Klarna becomes Europe’s most valuable FinTech on the back of $650m round

Swedish payments unicorn Klarna can convincingly claim to hold the title of Europe’s most valuable privately-owned FinTech company after a $650m funding round pushed its valuation past the $10.65bn mark.

The new valuation almost doubles the one $5.5bn valuation Klarna bagged after closing a $460m investment round in August 2019. It also ranks the company as the fourth highest valued FinTech in the world, according to Klarna.

The new valuation puts Klarna way ahead of Revolut and Checkout.com that have both claimed $5.5bn valuations in the last year, giving each of them potential bragging rights of being named Europe’s most valuable FinTech.

Silver Lake, the technology investment company, led the round. “Klarna is one of the most disruptive and promising FinTech companies in the world, redefining the e-commerce experience for millions of consumers and global retailers, just as e-commerce growth is accelerating worldwide and rapidly shifting to mobile,” said Egon Durban and Jonathan Durham, respectively co-CEO and managing partner, and managing director of Silver Lake.

Other backers participating in the round included Singaporean wealth fund GIC, BlackRock and HMI Capital. Moreover, Merian Chrysalis, TCV, Northzone and Bonnier have acquired shares from existing shareholders.

Previous investors into the FinTech includes Sequoia Capital, Dragoneer, Permira, Commonwealth Bank of Australia, Bestseller Group and Ant Group.

Klarna will use the new cash injection to fuel further development of its shopping offering, continue to grow its global presence and accelerate growth across all markets. The venture will particularly focus on growing its hold of the US market where the business now has more than nine million consumers.

“We are at a true inflection point in both retail and finance,” said Sebastian Siemiatkowski, co-founder and CEO of Klarna. “The shift to online retail is now truly supercharged and there is a very tangible change in the behaviour of consumers who are now actively seeking services which offer convenience, flexibility and control in how they pay and an overall superior shopping experience.

“Klarna’s unique proposition, consumer preference and global retailer network will prove an excellent platform for further growth. The Klarna team is honoured to welcome such world class investors to support our mission to become the world’s favourite way to shop.”

Klarna has more than 90 million consumers worldwide and its app has more than 12 million monthly active users across the globe, with 55,000 daily downloads. The company has also added more 35,000 new retailers to ts network of more than 200,000 retail partners during the first half of 2020.

“Klarna’s rapid growth at scale is evidence of how effectively its disruptive offering is meeting evolving consumer needs during these uncertain times,” said Mick Hellman, and Sean Barrett, respectively managing partner and partner at HMI Capital. “We are thrilled to continue our partnership with Sebastian and his team and look forward to supporting Klarna in the years ahead.”

John Doran, general partner at TCV, added “After emerging as the clear category leader in Europe, Klarna is now seeing incredible momentum in the US market with more than nine million consumers in the US alone and having signed a large number of blue-chip retailers to its platform.

“Klarna’s payments solutions offer a very compelling value proposition to both merchants and consumers as shown by its remarkable customer stickiness and impressive growth. We have been tracking Klarna’s continued execution for some time and are delighted to be able to partner with Sebastian and the entire Klarna team to help support their journey as they continue to serve a very large and rapidly growing global e-commerce market.”

Siemiatkowski has also hinted that more is to come, saying that Klarna might go public in the next two years or so.

The news comes after Klarna’s losses jumped to $59.8m in the first six months of 2020, a sevenfold increase from the same period in 2019. In the same period its total net income came in at $531.23m, representing a 37% rise from the first half of last year.

Copyright © 2020 FinTech Global

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