Klarna

Klarna Acquires Germany’s Sofort For $150M To Build A Formidable European Payment Network

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Klarna, the Stockholm-based payments company that has raised a whopping $250 million from top-tier investors like Sequoia Capital, is making an acquisition of its own.

The company, which makes it easy for European consumers to buy goods online before paying, is acquiring Germany’s market leader Sofort. Together, they’ll have 10 percent market share in greater Europe’s $100 billion e-commerce market. Their network will cover 14 countries in the region and 43,000 merchants. Between them, they’ll have 25 million users and partnerships with more than half of Germany’s online merchants.

KlarnaKlarna is buying Sofort from their majority shareholder Reimann Investors. No details were shared about how much the acquisition was structured, but we hear the price is around $150 million. Klarna plans to operate both companies’ products separately. The transaction is still subject to approval by Sweden’s Financial Supervisory Authority.

Klarna may not be well-known in the U.S. but it was started with the mission of allowing consumers to buy goods the way they do in physical stores — by touching and feeling them before they pay for them. Behind Klarna’s network is a complicated set of anti-fraud technologies that can help the company assume the credit and financial risks that an individual merchant might have to otherwise carry.

They have a one-click purchase option that they say allows merchants to see on average a 10-30 percent uptick in sales. They’ve grown this business to $200 million in revenues per year.

The company, which has 850 employees, has raised $250 million in funding from investors including Sequoia Capital, DST and General Atlantic. They are naturally strong in Nordic countries like Sweden, Norway and Denmark while Sofort, which was 130 employees, leads in Germany and Austria.