Buy now, fray later

15 Sep 2020 By Karen Kwok Follow @KarenKKwok

The Swedish buy-now-pay-later startup’s new funding round means it has doubled its worth in a year. That looks reasonable relative to rival Afterpay’s market valuation. It looks less so once you use multiples that better reflect competition and regulatory risks.

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Klarna on Sept. 15 said that it had raised over $650 million in an equity funding led by Silver Lake, as well as Singapore’s sovereign wealth fund GIC and BlackRock, valuing the Swedish payment provider at $10.65 billion. Klarna’s valuation at its last funding round in August 2019 was $5.5 billion.

Klarna offers interest-free financing on retail purchases, allowing buyers to pay in instalments. It is backed by a range of investors including Sequoia, Permira and rapper Snoop Dogg.

The company’s losses in the first half of 2020 have increased sevenfold to 522 million Swedish crowns ($63 million) compared to the same period last year.

Klarna Chief Executive Sebastian Siemiatkowski told Reuters in an interview on Aug. 27 that he planned to list the payment company in one or two years, and would likely do so in the United States.

Context News

Klarna offers interest-free financing on retail purchases, allowing buyers to pay in instalments. It is backed by a range of investors including Sequoia, Permira and rapper Snoop Dogg.

The company’s losses in the first half of 2020 have increased sevenfold to 522 million Swedish crowns ($63 million) compared to the same period last year.

Klarna Chief Executive Sebastian Siemiatkowski told Reuters in an interview on Aug. 27 that he planned to list the payment company in one or two years, and would likely do so in the United States.

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