STOCKHOLM, Sept 15 (Reuters) - Swedish payments provider
Klarna Bank AB said on Tuesday it has raised $650 million from
investors led by Silver Lake, lifting its valuation to $10.65
billion, as it seeks to take on rivals such as PayPal
and Australia's AfterPay in the fiercely competitive
The spread of the coronavirus has led more people to shop
online and use options like "buy-now-pay-later" in several
interest-free instalments offered by the alternative credit
Klarna launched a shopping app last year in the United
States, which is set to become the company's largest market by
the end of the year as its customer base in the region grew
about 550% in the first half of the year.
Technology investor Silver Lake contributed $500 million in
the new funding round for less than a 5% stake, Klarna Chief
Executive Sebastian Siemiatkowski told Reuters.
He said he had invested additional funds in Klarna. He did
not disclose the amount.
Other investors include Singapore's sovereign wealth fund
GIC, funds managed by BlackRock and HMI Capital. Concurrently,
Merian Chrysalis, TCV, Northzone and Bonnier have acquired
shares from existing shareholders, the company said.
Reuters had reported about the potential fund-raising round
last week, citing sources.
The company's valuation is now nearly double the $5.5
billion valuation reached after a previous funding round last
Existing investors include rapper Snoop Dogg, Sequoia
Capital, Dragoneer, Permira, Commonwealth Bank of Australia,
Bestseller Group and Ant Group.
Founded in 2005, Klarna allows shoppers to buy online
through its merchant partners and settle the dues in four
instalments using its "buy-now-pay-later" (BNPL) service.
Klarna, which plans to list in New York in the next two
years, reported its first annual loss earlier this year due to
investments in the United States and the UK. The losses also
jumped seven-fold in the first half of the year.
The new funding would be used for investments in the United
States and for developing the company's products for merchants
and customers, Siemiatkowski said.
While Klarna and AfterPay have been vying to corner a bigger
market share in the United States, payment processor PayPal has
started offering its own BNPL service in the country.
Siemiatkowski brushed off stiffer competition, saying Klarna
already competes with PayPal in the Nordics, Germany and the UK.
(Reporting by Supantha Mukherjee in Stockholm, Editing by
Sherry Jacob-Phillips and Susan Fenton)