Klarna, Europe’s most valuable tech startup, raises $1 billion in funding at a $31 billion valuation

Last week, we wrote about Klarna after a report from CNBC that Europe’s most valuable startup was in talks to raise $1 billion in new funding. Today, Klarna confirmed it has secured $1 billion USD in an equity funding round to accelerate international expansion and further capture global retail growth.

The 4x oversubscribed round included a combination of new and existing investors and closed at a post-money valuation of $31 billion USD, making Klarna the highest-valued private fintech in Europe and the second-highest worldwide. In conjunction with the funding, Klarna also announced the company will pledge 1% of the capital raised to a newly created initiative that focuses on key sustainability challenges around the world. The initiative will be formally launched on April 22 on World Earth Day.

Klarna’s direct-to-consumer app, which enables users to shop at any store or brand online with installment payment options, is strongly resonating as consumers have become more focused on convenience, value, and control.

Commenting on the funding, Sebastian Siemiatkowski, co-founder and CEO of Klarna: “At Klarna, we solve problems – that is the heart of what we do for both consumers and retailers. Consumers want transparent products to help them bank, shop and pay that reflect the way they live their lives, not just outdated traditional models. Each and everyone of us at Klarna will continue to work hard on this, but it is also time for us, with our culture of change, disruption and innovation, to focus on tackling bigger, more complex issues. I believe our industry has a responsibility to help in some way solve global sustainability issues and I hope others will join Klarna in our ambition.”

The Snoop Dogg-backed startup is also thinking of going public. Currently valued at $31 billion, Klarna is also among many potential tech IPO candidates in Europe — others include Deliveroo and Wise. Klarna co-founder and CEO KlarnaSebastian Siemiatkowski said a stock market listing could happen as soon as this year.

Klarna was founded in 2005 in Stockholm, Sweden with the aim of making it easier for people to shop online. In the last 12 years, technology has evolved, excited, and transformed the world around us, yet their mission remains as relevant as ever, to make paying as simple, safe, and above all, smooth as possible.

Klarna’s app has more than 12 million monthly active users worldwide, with 55,000 daily downloads, significantly outpacing its nearest competitor with almost 4x as many downloads over the last year. Klarna, a unicorn startup,  is one of the world’s largest providers of “buy now, pay later” services, which offer shoppers interest-free financing over a period of installments.