Buy-now-pay-later program Klarna says they have raised 1 billion dollars at a valuation of 31 billion dollars, triple the price investors gave the Swedish payments firm during its last funding rounding.
Klarna’s valuation has been helped by rapid U.S. growth. The company’s initial goal was to raise 500 million dollars. High investor demand has led to the company’s growth. In September, Klarna was valued at 10.6 billion dollars.
Currently, Klarna has about 90 million users worldwide and the U.S. is set to be Klarna’s biggest market after Germany by the end of 2021. Last week, The company said they had signed up 20 major U.S. brands and attracted a million new customers per month in the last quarter of 2020.
Klarna’s service allows users to pay in four interest-free installments when they shop online or in-store. They also offer savings accounts and other banking services.
Despite the popularity of its service among customer, governments are concerned that this encourages people to spend more than they can afford, which will eventually lead to an economic crisis. Klarna is on a mission to challenge the credit card industry as they view their method as more equal, offering customers the chance to go four months without paying interest.
Speculation as to when Klarna will launch an IPO has been rising. The company recently hired a chief financial officer, which is further leading to speculation that an IPO launch could be soon. Klarna’s current existing backers include Silver Lake, Sequoia Capital, GIC, BlackRock Inc., and HMI Capital.
photo: via klarna.com