Buy now, pay later (BNPL) giant Klarna is eyeing a new fundraise that could put the Swedish FinTech’s valuation close to an estimated one-third below the roughly $46 billion it came in at less than a year ago, according to media reports and unnamed sources Thursday (May 19).
The payments company could ask new and existing backers for as much as $1 billion in a deal that could put its post-money valuation in the low $30 billion range, sources told Bloomberg. Klarna hit a record-high valuation for a European FinTech last June following an investment by SoftBank’s Vision Fund 2.
See also: Klarna Expands Urban Outfitters, Anthropologie Partnership to US
The new funding is reportedly being handled by Goldman Sachs, but the date and the timing of a potential deal are still in the works and could also fall through, reports noted.
Klarna’s valuation accelerated following multiple fundraising rounds during the pandemic as digital transactions were prioritized for both consumers and businesses. Following Klarna’s funding last June, it was more valuable than most large European banks.
The company has been backed by several investors, including SoftBank, Sequoia Capital and Permira.
Related: GoDaddy Brings Klarna’s BNPL Option to the Domain Aftermarket
The BNPL installment credit firm works across 20 markets around the world, but it has experienced operating losses that have almost doubled in 2021 to $487 million.
The installment billing space is also facing increasing competition, with Klarna rival Affirm down 75% on the Nasdaq this year and newcomers from PayPal and Barclays coming to the table.
Regulatory scrutiny is another aspect facing the sector, with the U.K. government last year moving to start regulating BNPL products in the name of better protecting consumers.
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PYMNTS data shows that BNPL transaction volumes are growing, which could mean greater durability. Over 400,000 global retail partners, including H&M, Saks, Sephora, Macy’s, Ikea, Expedia Group and Nike, have integrated Klarna’s technology online and in-store.
Klarna launched in 2005 and processed $80 billion worth of transactions in 2021, up 42% from 2020. It acquired comparison shopping service PriceRunner last month and purchased eCommerce technology firm Hero Towers, as well as the the travel-planning platform Inspirock.
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