Klarna has become the largest private fintech start-up in Europe

Klarna has become the largest private fintech start-up in Europe after a new funding round valued the Swedish payments group at $5.5 billion ahead of a potential stock market flotation. The Swedish “buy now and pay later” company raised $460 million in equity from investors including Silicon Valley venture capital company Dragoneer, the Commonwealth Bank of Australia, and funds managed by the world’s largest asset management group BlackRock. Klarna’s valuation has risen from $2.5 billion at the start of this year to $3.5 billion in April… to today’s post-money valuation of $5.5 billion, ranking it as the eighth most valuable private fintech globally… Klarna is the latest in a series of Swedish tech success stories that include the music streaming company Spotify to gaming groups King and Mojang. Stockholm has produced more billion-dollar “unicorn” companies than any other region except Silicon Valley… Founded in 2005 by a trio of business school friends, Klarna took the idea of customers only paying when they received an invoice and applied it to online shopping. It now processes $29 billion of transactions for merchants such as Asos and Ikea, earning fees from them as well as interest from customers who pay late. Last year, it made an operating profit of $19 million on revenues of $627 million. 

Richard Milne