Ant Financial Group invests in PayTech firm Klarna

Alibaba Group’s Ant Financial Services Group, owner and operator of Alipay, has taken a minority stake in Swedish buy now, pay later specialist Klarna.

Terms of the deal were not disclosed. However, Reuters reported the stake amounts to less than 1% and is made up of existing and new shares. It added that this was done at a “slight uptick” to Klarna’s $460 million funding round last year, which valued the company at $5.5 billion.

The pair say that this will deepen an ongoing collaboration which currently enables shoppers at AliExpress, the global retail online marketplace of Alibaba Group, to use Klarna’s Pay later solution across multiple markets.

“For too long consumers have had to endure non-intuitive, boring and overly complex services when shopping both online and offline. At the heart of this cooperation is a shared ambition of innovating truly superior shopping experiences and creating destinations of inspiration for consumers across the world,” says Sebastian Siemiątkowski, CEO at Klarna.

“Alipay, and the wider Alibaba Group, have truly set the global pace on retail innovation and the app economy. We are delighted in this confidence shown in Klarna in defining the future of payments and shopping and are very much looking forward to working together further in the future.”

First loss

Klarna recently announced that it had hooked over seven million customers in the UK, an increase of 2x compared to last year.

More than 1.6 million Brits have downloaded the venture’s app to date. In the last six months of 2019, an average of 88,000 new UK customers a week chose its pay later services at checkout.

At the same time, however, it reported a loss of $113 million on revenues of $740 million in 2019. This is its first loss since the company was founded 15 years ago. Growth in new markets meant more first time customers who have proved less reliable with repayments.