Klarna has raised $460 million in an equity funding round, at a post money valuation of $5.5 billion. This new valuation ranks Klarna as the largest private fintech in Europe and as one of the largest private fintechs globally.
This funding will help Klarna to continue its rapid rise in the US market, where it is currently growing at an annual rate of 6 million new US consumers. The uniqueness of Klarna’s consumer offering, providing a healthier, simpler and smarter alternative to credit cards, with the addition of multiple services to smoothen the shopping experience, online and offline, is clearly resonating with the US consumer. This is as consumers are turning away from revolving credit lines towards alternative and more flexible financing alternatives. Most importantly, Klarna’s recently launched shopping app which allows its users to shop with Klarna at any store or brand online has been received very positively, with 3x more daily downloads than any of our direct competitors and with now more than 50 per cent of the app users purchasing each week.
Klarna has also seen a surge in merchant demand for its services. Klarna is now powering over 3000 merchants in the US — including rue21, ASOS, Lulus, Toms, Superdry, Sonos and Acne Studios — and helping them increase new consumer acquisition, average order value and retention. The business results are strong, with merchants who are offering ‘Pay in 4’ reporting a 68 per cent increase in average order value, a 44 per cent increase in conversion compared to cards and 21 per cent higher purchase frequency. Global brands H&M, Abercrombie & Fitch and Boohoo Group will soon go live with Klarna and there are currently more than a 1000 merchants integrating with Klarna with a combined volume of $10bn. The momentum of acquisition continues and in July a record number of new merchants signed with Klarna in the US.
Klarna’s footprint continues to grow, now serving over 60 million consumers, 130,000 merchants partners, 1 million transactions daily and is in sight of a $1 billion annual revenue. It is therefore pleased to announce that with the participation of the Commonwealth Bank of Australia, Australia’s largest retail and commercial bank, in the equity round, it has also agreed to establish an exclusive partnership for the Australian and New Zealand markets.
Sebastian Siemiatkowski, co-founder and CEO of Klarna: “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 one’s customers. We, all 2500 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. ”
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