Klarna valued $5,5B thanks to $460M round, which makes it the most valuable FinTech on the world.
Ok, ok... ONE OF THE MOST VALUABLE FinTechs on the world :) But.. definitely the most valuable FinTech in Europe. Let's come back to the subject tough.
Klarna, the Sweden-born payments and banking service provider, has raised $460 million in an equity funding round at a post-money valuation of $5.5 billion, the company announced today.
The company points out that the valuation makes it the largest private fintech company in Europe. It's financing round is the latest in a string of mega-rounds for European fintech companies. To nae few:
TransferWise announced $292 million in funding,
Monzo raised $144 million,
Interesting times. A lot of <3 from investors to FinTech/Challenger banks this year.
As company is stating in their press note: this funding will help Klarna to continue its rapid rise in the US market, where it is currently growing at an annual rate of 6 million new US consumers. The uniqueness of Klarna’s consumer offering, providing a healthier, simpler and smarter alternative to credit cards, with the addition of multiple services to smoothen the shopping experience, online and offline, is clearly resonating with the US consumer. This is as consumers are turning away from revolving credit lines towards alternative and more flexible financing alternatives. Most importantly, Klarna’s recently launched shopping app which allows its users to shop with Klarna at any store or brand online has been received very positively, with 3x more daily downloads than any of our direct competitors and with now more than 50% of the app users purchasing each week.
Klarna has also seen a surge in merchant demand for its services. Klarna is now powering over 3000 merchants in the US – including rue21, ASOS, Lulus, Toms, Superdry, Sonos and Acne Studios – and helping them increase new consumer acquisition, average order value and retention.
The business results are strong, with merchants who are offering ‘Pay in 4’ reporting a:
68% increase in average order value, a
44% increase in conversion compared to cards and 21% higher purchase frequency.
Global brands H&M, Abercrombie & Fitch and Boohoo Group will soon go live with Klarna and there are currently more than a 1000 merchants integrating with Klarna with a combined volume of $10bn. The momentum of acquisition continues and in July a record number of new merchants signed with Klarna in the US.
Klarna’s footprint continues to grow, now serving over 60 million consumers, 130,000 merchants partners, 1 million transactions daily and is in sight of a $1 billion annual revenue.
The funding round was led by Dragoneer Investment Group, a leading San Francisco based growth-oriented investor. Other investors in the round include Commonwealth Bank of Australia, HMI Capital LLC, Merian Chrysalis Investment Company Limited, Första AP-Fonden (AP1), IPGL, IVP and funds and accounts managed by BlackRock. This investment follows a funding round in April of this year that closed above the company’s $100 million target, driven by strong demand from Klarna’s existing investor base.
Sebastian Siemiatkowski, co-founder and CEO of Klarna:
Marc Stad, Founding Partner at Dragoneer:
“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.”
Richard Watts, Merian Chrysalis Investment Company:
“Klarna has built a highly-impressive, digital payment ecosystem, trusted by both retailers and consumers. By simplifying and improving the flexibility of the payments process, retail partners working with Klarna have seen considerable improvement in customer engagement and sales. Klarna is one of Europe’s great fintech success stories and the company continues to develop truly innovative payment solutions. This latest funding round will enable the company to execute on its ambitious international growth plans.”
Numis acted as exclusive financial advisor and placement agent to Klarna.