Tuesday 6 August 2019 3:04 pm

Klarna becomes Europe's most valuable fintech in $460m raise

Online payments giant Klarna has scooped up another $460m in an equity funding round led by Dragoneer, which values the fintech firm at $5.5bn.

Other investors included Commonwealth Bank of Australia, HMI Capital, Starling Bank investor Merian Chrysalis, Forsta AP-Fonden, IPGL, Institutional Venture Partners and several funds managed by Blackrock.

Swedish-born Klarna said it will use the funding to continue expanding in the US, where it is growing by around 6m users per year.

It is already widely popular in the UK, offering interest-free “buy now, pay later” services to more than 4,000 integrated merchants including ASOS, Cult Beauty, Ray-Ban and Schuh.

Klarna added that it will soon have new partnerships available with H&M, Abercrombie & Fitch and Boohoo.

The firm is nearing $1bn in annual revenue this year, with more than 60m consumers and 130,000 merchants using its platform.

Today’s funding announcement follows a previously-undisclosed round earlier this year that closed above Klarna’s $100m target.

Co-founder and chief executive Sebastian Siemiatkowski said the move came at “a decisive time in the history of retail banking”.

“Klarna is one of Europe’s great fintech success stories and the company continues to develop truly innovative payment solutions,” said Merian Chrysalis’ Richard Watts.

“This latest funding round will enable the company to execute on its ambitious international growth plans.”