The Swedish Payments Startup With A $2.5B Value

Klarna AB, the Swedish payments startup that offers a digital checkout service, is valued at $2.5 billion, according to its latest funding round.

As The Wall Street Journal reported Tuesday (Aug. 18), the company, which is looking to launch in the United States, garnered the valuation in tandem with a secondary offering, worth about $80 million from a series of investors. The firms putting money into Klarna included Northzone, a venture capital firm, Wellington Management Co., and Wellcome Trust, a foundation. The $80 million worth of stock that was bought by this consortium came from a series of selling holders.

WSJ reported that the company was valued at $1.4 billion last year, after existing investors put about $100 million into the company. Under the Klarna platform, the company itself pays a merchant and then collects funds from the customer. In order to check out, customers use an email and a postal ZIP code to identify themselves, and Klarna collects the funds within 14 days. That, of course, is relatively less information than has to be entered using other services, and Klarna says that its own platform offers better security than seen with competitors.

In terms of business strategy, Klarna will be bringing its digital payments services to the United States with 10 merchants. At the moment, in Europe, the company has a presence in 18 countries with a roster of 55,000 merchants. The push into the U.S. follows a December announcement by the company that it would spend as much as $100 million through the next few years to drum up business in the States. The company, according to WSJ, had $300 million on its top line in 2014, and that stems from about $7.8 billion in transactions processed.

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