Klarna, the payment and banking company, has raised $460m in a new equity funding round, which has pushed its valuation past the $5.5bn mark and makes it Europe’s largest FinTech enterprise.
Dragoneer Investment Group, a growth-oriented investor, led the round. The investment was also supported by Commonwealth Bank of Australia, HMI Capital LLC, Merian Chrysalis Investment Company Limited, Första AP-Fonden and IPGL as well as funds and accounts managed by BlackRock.
Klarna will use the money to keep expanding into the US. Part of how that expansion will look like was unveiled earlier in August when the unicorn announced it would expand its UK partnership with retailer ASOS across the pond.
“This is a decisive time in the history of retail banking,” said Sebastian Siemiatkowski, co-founder and CEO of Klarna. “Finally, transparency, technology and creativity will serve the consumer, and there will be no more room for unimaginative products, non-transparent terms of use or lack of genuine care of ones customers. We, all 2500 of us at Klarna, are humbled and honoured, and now also further empowered, to play a role in this improvement of an industry for the benefit of the consumer, worldwide and in the US in particular.”
Since going stateside, Klarna has grown to powering over 3,000 merchants in the US to boost consumer acquisition, average order value and retention. The business results are strong, with merchants who are using Klarna’s services to offer customers the option of paying in four installments reporting a 68 per cent increase in average order value, a 44 per cent increase in conversion compared to cards and 21 per cent higher purchase frequency.
Commenting on the private investor’s decision to invest in Klarna, Marc Stad, founding partner at Dragoneer said “the Klarna team have built an exceptional payments business with a global footprint, operating in a huge addressable market with strong tailwinds.” This made it fit in with Dragoneer’s strategy to invest in disruptive startups with “world-class management teams.”
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