Klarna secures $460m equity funding; US growth on agenda

 

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With an agenda to expand its base in the US, Klarna, a global provider of payments, banking, and retail services, has received equity funding of $460 million at a post-money valuation of $5.5 billion.

With the additional funds, Klarna claims to have become the largest private fintech in Europe and one of the largest private fintechs globally. The latest funding is expected to aid Klarna in furthering its rapid rise in the US market, where it is currently growing at a rate of 6 million new US consumers per year.

The funding round was led by San Francisco-based investor Dragoneer Investment Group along with other investors including Commonwealth Bank of Australia (CommBank), HMI Capital LLC, Merian Chrysalis Investment Company Limited, Första AP-Fonden (AP1), IPGL, IVP and funds and accounts managed by BlackRock. The investment follows a funding round in April this year that closed above the company’s $100mn target.

Marc Stad, Founding Partner at Dragoneer said, “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.”

On the occasion, Klarna also shared that their recently launched shopping app titled “Klarna-Smoooth Shopping” “has been received very positively”, with 3 times more daily downloads than that of the competitors.

Sebastian Siemiatkowski, co-founder and CEO of Klarna commented, “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.. ”

Klarna has also witnessed a surge in merchant demand for its services, as the company is currently serving over 60 million consumers, 130,000 merchants partners, 1 million transactions daily and is in sight of a $1bn annual revenue. And, with the participation of the CommBank of Australia in the equity round, Klarna has promised an exclusive partnership for the Australian and New Zealand markets with regard to the merchant tie-ups.

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