Klarna Officially Closes $800 Million Down Round

The popular “buy now, pay later” app Klarna has confirmed its latest investment round. Following reports last week, the FinTech has now officially announced that it’s raised $800 million in funding. The round builds upon a $639 million venture round the company closed in June 2021. However, while the earlier round valued the company at $45.6 billion, the latest raise cut that valuation to $6.7 billion.

Like many other BNPL platforms, Klarna has helped popularize the “pay-in-4” format where customers pay for a quarter of their purchases upfront with subsequent payments every 2 weeks. This financing option comes with no interest or other fees. Furthermore, Klarna has begun expanding its offerings in various ways. For example, last month, the company rolled out the Klarna Card, giving customers an even easier way to split purchases into four payments, albeit without a down payment in this case. While the card does carry a $3.99 a month fee, that fee is waived for the first 12 months.

Despite the dip in valuation, Klarna states that they continue to be on an upward trajectory. Among the stats they shared was that the platform currently has close to 30 million users in the United States. Additionally, with 150 million users worldwide, the company notes that it is now larger than American Express.

In the press release announcing the funding round, Klarna CEO Sebastian Siemiatkowski defended the down round, noting, “Klarna is the only fintech in the world that has been profitable for its first 14 years of existence… The last few years however we have made significant investments as we took the opportunity to transform Klarna into a global player. With the recent shift in investor sentiment we also now shift our focus and look forward to returning to a modus operandi of growth and profitability. The foundation for a global leader has been set.” 

Siemiatkowski added, “It’s a testament to the strength of Klarna’s business that, during the steepest drop in global stock markets in over fifty years, investors recognized our strong position and continued progress in revolutionizing the retail banking industry.”

Elsewhere, Sequoia partner Michael Moritz also commented on the matter, stating, “The shift in Klarna’s valuation is entirely due to investors suddenly voting in the opposite manner to the way they voted for the past few years. The irony is that Klarna’s business, its position in various markets and its popularity with consumers and merchants are all stronger than at any time since Sequoia first invested in 2010. Eventually, after investors emerge from their bunkers, the stocks of Klarna and other first-rate companies will receive the attention they deserve.”

Klarna’s current state is interesting in that, as they point out, the company is doing well overall. However, the fall in valuation was always going to be the headline for this funding round, as evidenced by the heavy pushback Klarna gives in its press release announcing the round. Of course, something not mentioned in the release is Apple, which is planning to launch its own BNPL platform in a matter of weeks. As a result of these factors and others, it will certainly be interesting to see how Klarna leverages its newly-raised $800 million and where the company goes from here.


Jonathan Dyer

I'm a small town guy living in Los Angeles looking to make solid financial decisions. I write for a number of finance websites, including HuffingtonPost and Business2Community. I founded DyerNews.com in 2015 to focus on personal finance and the emerging FinTech markets.

Other Articles by Jonathan Dyer

Ness Launches for Health and Wellness-Focused Credit Card

A new premium credit card that puts a heavy emphasis on health and wellness is now launching a public beta. This week, Ness announced the debut of the Ness Card, partnering with a number of top wellness brands in the process. The card is issued by The Bank of Missouri and will operate on the Mastercard network. Starting with rewards, the Ness Card will earn 5 points per dollar spent...

On-Demand Employee Pay Platform Rain Raises $66 Million

A startup that helps employees access their earned wages more quickly and easily has just raised some major funds of its own. This week, Rain announced that it has raised $66 million in equity. The Series A was led by QED Investors and Invus Opportunities, while WndrCo, Tribe Capital, and Dreamers VC also participated. In addition to the equity round, Rain raised an additional $50 million via debt facility, arranged...

TTV Capital Closes Fund VI for Early-Stage FinTech Investments

A major venture capital firm has announced the closure of its latest fund, which will invest in a number of growing FinTech startups. This week, TTV Capital announced the closure of its sixth fund (Fund VI), with a total of $250 million. Capital in this fund was contributed by both new and existing partners, including institutional and strategic investors. According to the firm, initial plans called for the fund to...