Buy now pay later (BNPL) giant Klarna is eyeing up a new funding round that could see its valuation jump to $60bn (£44bn) as it looks to fund an expansion.
Swedish-headquartered Klarna, Europe’s most valuable fintech, is likely to attract the attention of sovereign wealth and pension funds as new investors in the round, Bloomberg reported today.
Bosses are also exploring allowing existing backers to sell their holdings as part of the fundraising, as well as looking at debt financing from banks to help fund expansion, according to the reports.
The firm’s most recent round was backed by venture capital heavyweights including Sequoai and Permira, as well as Japanese investment giant Softbank, fetching the firm a valuation of $45.6bn.
The round comes after a boom in popularity for BNPL products through the pandemic as shoppers flocked to online platforms and looked for alternative payment methods.
Klarna last month also rolled out a physical payments card to British customers, marking its first foray into physical payments in the UK after previously rolling out the card in Sweden and Germany.
The card, which allows users users to delay payments on their purchases in-store, has been met with concerns from debt campaigners that it is allowing users to sleepwalk into debt while not holding the same regulatory protections as traditional credit cards.
Kalgera, a financial safeguarding company, warned that BNPL was playing into the looming cost of living crisis last week, and debt charity Step Change warned recently that BNPL needs regulating to prevent people with financial difficulties from struggling further.
Klarna UK boss Alex Marsh told City A.M. that the unregulated nature of BNPL products was artificially amplifying concerns and claimed that BNPL in the long run would be seen as “a more stable form of credit than credit cards.”
Klarna declined to comment.