Klarna

Founded in 2005 by Niklas Adalberth, Sebastian Siemiatkowsky and Viktor Jacobsson, Klarna is an online payment service aiming at removing the risk of online purchases from customer and store.

Unlike PayPal or traditional credit cards, Klarna users don't have to create an account or enter financial details when checking out in an online store. They can enter as little as an email address and zip code and pay Klarna later.

Klarna has the benefit of data - what device a user is on, what time of day they are making the purchase and the item in question to determine the risk of supplying credit. They achieve this in part with Klarna Checkout, which handles the entire transaction.

Klarna offers users a "buy now, pay later" experience. They allow users to pay in installments over time with zero interest. Their fees are charged to the retailer. This motivates user to purchase by reducing friction at checkout. When users fail to pay, Klarna passes the accounts to debt collection agencies. Late or missed payments also negatively affects users credit scores.

Klarna acquired Sofort AG in 2013, which provided online payment solutions for buyers and merchants in Europe. This acquisition gave Klarna 10% market share in Europe's $100 billion e-commerce market.

Klarna acquired Cookies App in 2016. Cookies App was acquired a few weeks after they announced they were shutting down. The acquisition was largely for the team behind Cookies App.

In 2017, Klarna acquired BillPay. BillPay was a German payments company, purchased by Klarna from their previous owner, Wonga, and helped build a stronger presence in European payments for Klarna.

In May, 2018, Klarna acquired ShopCo Technologies. ShopCo offered a free Universal Cart browser extension which allowed users to purchase with a single click. Klarna discontinued the browser extension with their acquisition.

In September of 2018, Klarna acquired Close Brothers Retail Finance and boosted their position in the UK. Close Brothers Retail Finance provided omni-channel retail finance and allowed shoppers to pay in simple, flexible monthly payments. They worked to convert more browsers into buyers. Their integration into Klarna allowed them to develop further and provide more value to merchants.

Jane Walerud, running into Niklas, Sebastian and Viktor at a networking event in 2005, financed Klarna for 60,000€. In return she took 10% of the company. She offered to connect them with an engineering team for 37% of the company.

In December 2007, Klarna raised $2.2 million from their Series A. Investors included Investment AB and Öresund.

In May 2010, Klarna raised $9 million from Sequioa Capital.

In December 2011, Klarna raised $155 million. Investors included General Atlantic and DST Global.

In 2016, Klarna tapped debt markets for $35.2 million to support expansion into the U.S. and diversify funding.

In March, 2017, Creandum bought shares for SEK 46 million in Klarna to aid in the acquisition of BillPay.

Anders Holch Povlsen, in June 2017, announced, with Klarna, a purchase of at least 10% of Klarna. He bought shares from existing investors General Atlantic, DST Global and co-founder Niklas Adalberth.

Visa made an equity investment in Klarna at the same time. Neither party disclosed the size of the stake. This came a week after Klarna received a banking license and re-branded as Klarna Bank.

A month later, in July, Klarna announced funding from Permira for around 10% and reported between $225-250 million.

In October 2018, Klarna announced a $20 million investment from H&M which saw Klarna build an omni-channel payment service spanning H&M's physical and online stores.

In January 2019, Snoop Dogg became a minority investor in Klarna and the face of their Smoooth campaign. The campaign saw Snoop Dogg change his name to Smoooth Dog.

In April 2019, Klarna raised $93 million from existing investors. These include approximately 90 persons and companies.

In August 2019, Klarna raised $460 million. Dragoneer Investment Group led the round. Other investors included Commonwealth Bank of Australia, HMI Capital LLC, Merian Chrysalis Investment Company Limited, Första AP-Fonden (AP1), IPGL, IVP and BlackRock managed funds. This funding pushed Klarna to a $5.5 billion valuation.