Klarna raised its valuation 50% to $ 45.6 billion in just three months as a company that buys now pays later raised new capital from Japan’s SoftBank.
The new valuation – up from $ 31 billion in March and $ 11 billion last September – solidifies the Swedish group’s status as the most valuable privately-owned fintech in Europe.
Vision Fund 2 SoftBank spearheaded a $ 639 million round of fundraising and has joined investors including Silver Lake, China’s Ant Group, H&M and Sequoia Capital in anticipation of a highly publicized initial public offering in the next few years.
“Klarna’s growth is based on a deep understanding of how consumer buying behavior is changing, an evolution that we believe is accelerating,” said Yanni Pipilis, Managing Partner at SoftBank Investment Advisers.
Unlike the Vision Fund 1 SoftBank, which was largely externally funded, most of which came from the Middle East, the second Vision Fund is made up entirely of money from a Japanese investment group.
Last month, SoftBank founder Masayoshi Son said he would increase funding for Vision Fund 2 from $ 10 billion to $ 30 billion as the Japanese group ramped up investment in private startups around the world.
Klarna is rapidly advancing in the US and has told investors that her US business will soon be “several times larger than our current business,” according to materials published by the Financial Times. According to the same information provided to potential investors, the volume of payments processed by Klarna in the United States jumped 296% in the fourth quarter.
Chief Executive Officer Sebastian Semiatkowski told the Financial Times on Thursday that Klarna sees especially great opportunities in the US due to the “overuse” of credit cards there and the movement of millennials to rely more on debit cards.
Klarna, which is regulated as a bank in Sweden, markets its offering as a “super-app” used by consumers not only for payments, but also for shopping and retail banking.
However, it faces challenges with increasing political and regulatory scrutiny to buy now, pay later to companies after worrying about whether they are pushing consumers to buy items they cannot afford.
The Klarna app ran into trouble on May 27 when about 90,000 users were briefly able to view information about other customers, including in some cases name, address, email, and phone number.
Siemiatkowski previously called the “self-destruct” incident “so sad and disappointing” and caught the attention of data protection regulators.
Siemiatkowski has just returned from the UK as Klarna continues to view London as a possible stock exchange listing, even if the US remains the favorite.
He continued to praise Britain and London, saying that he was “deeply and sincerely impressed” by what he saw in London. He criticized the often “very bad” rules adopted by the EU and said the UK has a “huge opportunity” to become a global center for financial technology. “There is such awareness and interest in this topic,” he added.
Klarna is now ranked just above Spotify, a music streaming service based in Stockholm, in close proximity to Nordea, the largest bank in Scandinavia.
Siemiatkowski said the proceeds from SoftBank and other companies could be used for acquisitions, while an IPO would make sense not to raise capital, but to provide “liquidity” to its employees who have stock options, and since “we, we might want to do more M&A deals. ” But he added that he was “a little nervous” about the foam in the markets at the moment: “None of us are in a great hurry.”
Additional reporting by Miles Kruppa in San Francisco and Arash Massoudi in London
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