Klarna announced raising $650 million in funding from a group led by private equity firm Silver Lake.

Sweden United States Investments 15 September 2020
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Klarna, a Stockholm, Sweden-based financial services provider, announced the completion of a capital investment round of $650 million.

The deal, which values the company at $10.65bn, was backed by a group led by private equity firm Silver Lake. SIlver Lake's contribution is $500 million and other investors include BlackRock, HMI Capital and Singapore's government venture capital fund GIC. The transaction includes also a secondary component, whereas Northzone and Bonnier as well as Merian Chrysalis and TCV acquired shares from existing owners.

Klarna was last valued at $5.5bn in August 2019 and has raised about $1bn prior to this round.

Klarna, founded in 2005 by CEO Sebastian Siemiatkowski, provides consumers with the ability to pay in installments across a variety of retailers. The company, which also operates a banking licence in Europe, has a presence in markets throughout Europe, the UK, the US, Canada and Australia, as it allows consumers to pay in three- or four-part installments and to “try before you buy,” in which the company pays the merchant up front but doesn’t charge customers until 30 days after they receive the product. Klarna also provides customers with longer-term financing for big-ticket items.

Klarna has over $1bn in annual sales and more than 3,500 employees around the world, Klarna’s revenue comes primarily from fees paid by the more than 200,000 merchants that join with it, including H&M Hennes & Mauritz AB, Sephora, IKEA, Samsung Electronics and Wayfair. Such partnerships allow merchants to offer Klarna’s services directly to customers via their websites or in physical stores.