At an updated valuation of $45.6bn, Klarna continues to be the highest-valued private fintech in Europe

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Klarna enables customers to buy now and pay later at various stores across the world. Credit: Klarna Bank AB (publ).

Swedish fintech company Klarna has raised $639m in a new equity funding round led by SoftBank’s Vision Fund 2 to take its valuation to $45.6bn.

The payments firm said that the financing round also saw participation from existing investors – Adit Ventures, WestCap Group, and Honeycomb Asset Management.

Klarna expects the proceeds from the funding round to support its global expansion and also help it achieve further retail growth across the world.

In March 2021, the Swedish fintech company raised $1bn in equity funding, which took its valuation to $31bn.

SoftBank Investment Advisers managing partner Yanni Pipilis said: “Klarna’s growth is founded on a deep understanding of how the purchasing behaviours of consumers are changing, an evolution which we believe is accelerating.

“Klarna has already successfully expanded into the US and we are excited to continue supporting the team in bringing the next generation of financial services to new markets worldwide.”

The fintech company was founded in 2005 to make it easier for people in their online shopping. Klarna has been operating as a fully licensed bank with a specialisation in e-commerce payments.

It caters to consumers and retailers with payments, social shopping, and personal finances, and other services.

The Swedish fintech company had developed a system for providing an alternative to traditional credit facilities to shoppers and merchants.

Its direct to consumer app enables users to shop at any store or brand online while giving them the choice to pay in instalments.

The app is claimed to be used by around 18 million customers across the world and also at more than 250,000 retailers globally.

Using the app, consumers also get the options to make payments immediately or later and manage spending and available balances. Besides, the app gives them price-drop notifications, enables them to add favourite items to collections, initiate refunds, access customised discounts, and also track deliveries.

Klarna founder and CEO Sebastian Siemiatkowski said: “Consumers continue to reject interest-and fee-laden revolving credit and are moving toward debit while simultaneously seeking retail experiences that better meet their needs.

“Klarna’s more transparent and convenient alternatives align with evolving global consumer preferences and drive worldwide growth.

“I’m very proud of the investors who are supporting Klarna’s ambition to challenge these outdated models to empower consumers with fair, transparent, and convenient products to help them bank, shop and pay each day.”

Klarna reported more than $18.9bn gross merchandise value (GMV) for the first quarter of 2021, compared to $9.9bn in GMV for the same period in the previous year.