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Swedish online payment firm Klarna, whose shareholders include Snoop Dogg, announced Tuesday it reached a $5.5 billion valuation following a $460 million funding round, asserting its status as Europe’s largest private fintech
The Stockholm-based startup, lead by CEO Sebastian Siemiatkowski, plans to expand into the U.S. market, joining several other European financial firms with its “buy now and pay later” model for consumers. Dragoneer Investment Group of San Francisco led the most recent funding round, solidifying its entry into the U.S. market.
Klarna announced its collaboration with Snoop Dogg in January with a series of commercials featuring the rapper who is both a minor shareholder and the face of the “Get Smoooth” campaign.
The partnership, born of transcontinental investment, catapulted the Swedish fintech startup to global notoriety when the commercials went viral and images of Snoop-Dogg with pure-bred elite dogs, on a set awash of millennial pink became social media meme fodder.In a press release, Snoop-Dogg addressed his involvement as part of his European investment strategy.
“I’ve been looking for an opportunity to expand my tech investment portfolio to Europe and seeing the way Klarna operates and how they challenge the status quo, I think it’s a match made in heaven. I’m very excited about this partnership,” he said.
According to a recent press release about the funding round, Klarna currently services over 60 million consumers, 130,000 merchants, and is approaching $1 billion in annual revenue. They average 6 million new U.S. consumers each year and they believe the recent round of funding will fortify its strength in the foreign markets.
“The uniqueness of Klarna’s consumer offering, providing a healthier, simpler and smarter alternative to credit cards, with the addition of multiple services to smoothen the shopping experience, online and offline, is clearly resonating with the US consumer,” Klarna said in a statement.
Founded in Stockholm, Sweden in 2005, Klarna offers online consumers a seamless checkout experience with the option to pay now, pay later or over time with no interest. By directly purchasing inventory from the retailer, Klarna works with consumers to pay off the debt.
While he has not yet assigned a date, Siemiatkowski discussed the possibility of launching an initial public offering after H&M bought a stake in the firm and valued it at $2 billion.
“We have not taken a formal decision of listing, but Klarna is approaching a situation where I think we are more ready to list the company,” Siemiatkowski told Reuters in an interview.
The CEO of the “tech unicorn” – a startup with a valuation of more than $1 billion – suggested that he is also interested in untapped markets like China.
“People refer to the U.S. market as extremely competitive but in my world, it cannot compare to the Chinese one. There is much more to do in markets that are not as competitive,” Siemiatkowski said.