Just over three months after its final round of funding, the European fintech giant Klarna announces today that it has raised an additional $ 639 million for a staggering $ 45.6 billion cash valuation.
Rumors swirled in recent weeks that Klarna had raised more money for a valuation north of $ 40 billion. But the Swedish buy now, pay later behemoth and upstart bank declined to comment until now.
The latest funding cements 16-year-old Klarna’s position as the most valued private fintech in Europe.
In an exclusive interview with TechCrunch, Klarna CEO and founder Sebastian Siemiatkowski said the company has experienced explosive growth in the US and plans to use its new capital in part to continue to grow there and globally.
Particularly over the past year, fintech has experienced “massive momentum” in the country, where more than 18 million U.S. consumers now use Klarna, he said. That’s an increase from 10 million at the end of last year’s third quarter and an increase of 118% over the year. Klarna now lives with 24 of the 100 largest U.S. retailers, which it says are “more than any of its competitors.”
Overall, Klarna is live in 20 markets, has more than 90 million global active users and more than 2 million transactions per day completed on its platform. The company’s momentum can be seen in its impressive financial results. In the first quarter, Klarna cut DKK 18.1 billion. Dollars in volume compared to 9.9 billion. Dollars in the first quarter of the previous year. Throughout 2020, it processed $ 53 billion in volume. To put it in context; Affirm’s financial report in May expected it to handle $ 8.04 billion. $ In volume for the entire fiscal year 2021, and Afterpay projects $ 16 billion. $ In volume for the entire financial year.
March 2021 also represented a record month for global shopping volume with $ 6.9 billion of purchases made through the Klarna platform.
Meanwhile, in 2020, Klarna had over one billion in turnover. While the business was profitable in the first 14 years of life, it has not been profitable the last two, according to Siemiatkowski, and it has been by design.
“We have increased so massively in investments in our growth and technology, but driving at a loss is very strange for us,” he told TechCrunch. “We will return to profitability soon.”
Klarna has entered six new markets this year alone, including New Zealand and France, where it was just launched this week. It plans to expand into a number of new markets this year. The company has approx. 4,000 employees with hundreds in the United States in markets such as New York and Los Angeles. It also has offices in Stockholm, London, Manchester, Berlin, Madrid and Amsterdam.
While Klarna has partnered with over 250,000 retailers around the world (including Macy’s, Ikea, Nike, Saks), its Buy Now, Pay Later feature is also available directly to consumers via its shopping app. This means that consumers can use Klarna’s app to pay immediately or later, as well as manage expenses and see available balances. They can also do things like start refunds, track deliveries and get price drop notifications.
“Our shopping browser allows users to use Klarna anywhere,” Said Siemiatkowski. “No one else offers it and is rather limited to integrating with merchants. ”
Other things that the company plans to do with its new capital is focus on acquisitions, especially acquisitions, according to Siemiatkowski. According to Crunchbase, the company has made nine well-known acquisitions over time – most recently acquired Los Gatos-based content creation service provider Toplooks.ai.
“We are the market leader in this area and we will find new partners who will support us in this,” Siemiatkowski told TechCrunch. “To gives us better conditions for success in the future. Now we have more cash and money available to invest further in the long run. ”
Klarna has long been rumored to be published via a direct listing. Siemiatkowski said that in many ways the company already operates as a public company, offering shares to all its employees and reporting finances – giving the impression that the company is not in a hurry to go the public route.
“We report quarterly to national authorities and are a fully regulated bank, so do all the things you expect to see from public companies such as risk control and compliance,” he told TechCrunch. “We reach a point where it must be a natural development for the company to be listed on the stock exchange. But we are not preparing for an IPO anytime soon. ”
At the time of its final round of funding, Klarna announced dens Give one initiative to support the health of the planet. With this round, the company again gives 1% of the capital raised back to the planet.
Of course, investors are positive about what the company is doing and its market position. Yanni Pipilis, managing partner of SoftBank Investment Advisers, said the company’s growth is “based on a deep understanding of how consumers’ buying behavior is changes, ”a development that SoftBank only believes is accelerating.
Eric Munson, founder and CIO of Adit Ventures, said his firm believes “the best has not yet come as Klarna multiplies their addressable market through global expansion.”
To Siemiatkowski, what Klarna is trying to achieve is to compete with the $ 1 trillion plus credit card industry.
“We see right now all the signs are there. True competition is coming to this space, this decade, ”he said. “This is an opportunity to really disrupt the retail banking space.”