Fintech startup Klarna taps Permira for around $250M at $2.5B valuation

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Klarna, the Swedish startup that works with e-commerce businesses and retailers to provide financing and other payment services, today announced that it has picked up yet another large investment, its third inside of two months. Permira, the private equity firm and prolific late-stage tech investor, has taken a minimum 10 percent stake in the fintech business. Klarna and Permira are not confirming the exact amount getting invested, or the valuation. But TechCrunch understands that it is more than $225 million, and the FT is reporting a value of $250 million.

Klarna the startup was last valued at $2.25 billion in 2015 and a source confirmed to us that this valuation has gone up as the business has grown. If a $250 million investment works out to 10 percent of its valuation, that would mean Klarna’s overall value has ticked up to $2.5 billion.

As part of the investment, a Klarna spokesperson has confirmed to us that two of its previous investors, DST and General Atlantic, have now completely exited the business. Sequoia and Atomico remain investors.

Today’s investment follows another cash injection worth at least $225 million from Brightfolk, an investment firm tied to fashion retail magnate Anders Holch Povlsen, at the start of June. Later that same month, Visa also announced that it was making a strategic investment in Klarna, without revealing the size of the funding.

Added up, this means that Klarna has raised somewhere in the region of $500 million in the last 7 weeks.

The funding comes at a time when Klarna is doubling down on its business and making some big plans for how it wants to expand. Right now Klarna’s payment and financing technology is integrated with 70,000 merchants, touching some 60 million consumers, in multiple markets in Europe and the U.S.

While the bulk of its business up to now has been in services like providing financing at the point of sale — essentially giving buyers a way of, say, spacing out payments for large items — in June the company picked up a full banking license, which will give it the ability to expand into other payment and financing services. While Klarna has not revealed what these will be, we understand that its investment from Visa sheds some light on what at least some of these might be: credit services and credit cards are a likely candidate.

“As Klarna continues its journey towards a smoother shopping experience and now as a consumer-oriented and technology intensive bank, this is another exciting step for the company,” Sebastian Siemiatkowski, co-founder and CEO of Klarna, said today in reference to the new investment. “I am delighted to have a partner like Permira on board with their global footprint and strong expertise in ecommerce and fintech. I look forward to them strategically supporting the future development of Klarna.”

Along with DST and General Atlantic exiting, the investment will also see Niklas Adalberth, another co-founder who had been co-CEO (he departed from an operational role in 2015), also reduce his stake in Klarna, although he will retain equity in the company. If you recall, Adalberth and another (now former) Klarna executive, Jens Saltin, were accused of sexual assault in 2012. They denied all wrongdoing and the case was ultimately dismissed.

The company has indeed moved on a lot since those days. Building on an overall market that continues to see a lot of growth in e-commerce, in the last year, Klarna has picked up 17,000 merchant partners. It also said that it has had “strong growth” in the first half of this year after seeing transaction volumes increase by 50 percent in 2016.

Klarna has been profitable since 2005, which is also relative rarity among startups that work in and around the area of e-commerce. (Square, as a point of comparison, is still operating at a net loss, although it is narrowing the gap at a pace faster than some predicted it would.)

“In Klarna we see a unique scale fintech innovator that has successfully improved shopping experiences for both merchants and consumers,” said Andrew Young, Principal at Permira, in a statement. “We see many vectors that will drive future success and with Sebastian, we look forward to supporting the company’s future organic, geographic, and acquisition growth strategies.”