Klarna becomes most valuable European FinTech following major funding round

Swedish PayTech venture Klarna has closed a funding round valuing it at $5.5 billion, ahead of a potential stock market flotation. It now ranks as the largest private FinTech in Europe and the eighth most valuable one globally.

The ‘buy now, pay later’ specialist raised $460 million in equity from investors including Silicon Valley venture capital company Dragoneer, the Commonwealth Bank of Australia (CBA), and funds managed by BlackRock.

The cash will help Klarna to continue its expansion in the US market. And it will also enter Australia and New Zealand in partnership with CBA. It is now serving over 60 million consumers, 130,000 merchants partners, with one million transactions daily and $1 billion annual revenue in its sights.

“This is 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 ones customers,” says Sebastian Siemiatkowski, Co-founder and CEO, Klarna.

“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. ”

Marc Stad, Founding Partner at Dragoneer, comments: “Our strategy is to partner with a small number of disruptive, growth companies that are highly differentiated and run by world-class management teams. Sebastian and the Klarna team have built an exceptional payments business with a global footprint, operating in a huge addressable market with strong tailwinds.”

Asked by the FT if the company was edging closer to an IPO, Siemiatkowski replied: “At this point of time, it’s more likely than it has been previously. I definitely think it will happen. But it’s not like there’s a formal decision. Right now the whole company is just focused on making sure we are growing fast.”

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