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Klarna now Europe’s most valuable fintech startup with $650M round

Swedish payments company Klarna has reached a $10.65 billion valuation following a $650 million round.

Klarna has nearly doubled its valuation in a year.
(Astrid Stawiarz/Getty Images)

Swedish payments company Klarna has become Europe’s most valuable VC-backed fintech business after raising $650 million. Silver Lake led the round, alongside participation from Singapore’s sovereign wealth fund GIC, BlackRock and HMI Capital.

The round nearly doubles the company’s valuation to $10.65 billion, up from the $5.5 billion valuation it reached last year after raising a $460 million round. Klarna offers a “buy now pay later model,” which allows users to spread their payments over three or four installments with no interest. It also has a European banking license, allowing it to offer debit cards and savings accounts in Sweden and Germany.

The company saw a surge in demand during the pandemic, as shops closed and transactions moved online. In the first half of 2020, it added more than 35,000 new retailers and saw a 36% year-over-year increase in revenue to $466 million.

Now one of Europe’s most well-funded companies, having raised nearly $2 billion since its launch in 2005, Klarna hopes to expand in the US, where it already has 9 million customers and is reportedly eyeing an IPO that could occur in the next two years.

European fintech startups raised a record $7.4 billion from VCs in 2019, and despite a global pandemic, funding for 2020 has already hit around $5.7 billion, according to PitchBook data. In July, challenger bank Revolut—which until Klarna’s latest round was Europe’s most valuable fintech company—closed a $580 million Series D at a $5.5 billion valuation. German bank N26 also raised $570 million from existing backers in May.

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    Written by Leah Hodgson
    Leah Hodgson is a London-based senior reporter for PitchBook covering venture capital across Europe and the Middle East. Leah graduated from the University of Surrey with a BA in international politics with French. She has previously been a radio reporter in France. She later turned to financial journalism, covering the wealth management industry. She joined PitchBook in 2018.
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