Klarna, the Sweden-born payments and banking service provider, has raised $460 million in an equity funding round at a post-money valuation of $5.5 billion, the company announced today.

The company points out that the valuation makes it the largest private fintech company in Europe. Be that as it may, its financing round is the latest in a string of mega-rounds for European fintech companies; in May, Transferwise announced $292 million in funding, then Monzo raised $144 million, promptly followed by N26 and its $170 million round, as well as Zeta’s $65 million round and Atom Bank’s £50 million injection, and SumUp’s €330 million loan. Interesting times.

Klarna’s monster financing round was led by San Francisco-based Dragoneer Investment Group, and joined by the Commonwealth Bank of Australia, HMI Capital, Merian Chrysalis Investment Company Limited, Första AP-Fonden, IPGL, IVP, and several funds and accounts managed by BlackRock.

Klarna says the investment follows a funding round in April 2019 that closed above the company’s $100 million target, driven by significant demand from Klarna’s existing investor base, which includes the likes of Permira, Northzone and Sequoia Capital (but also Snoop Dogg and H&M).

With the fresh cash, Klarna hopes to break through in the US market with its ‘alternative for credit cards’ once and for all. Since its launch across the Atlantic, the company says it has grown at an annual rate of 6 million new consumers, and the cash infusion should help it boost that growth.

Sebastian Siemiatkowski, co-founder and CEO of Klarna, said in a statement:

“This is a decisive time in the history of retail banking. Finally, transparency, technology and creativity will serve the consumer, and there will be no more room for unimaginative products, non-transparent terms of use or lack of genuine care of ones customers. We, all 2500 of us at Klarna, are humbled and honoured, and now also further empowered, to play a role in this improvement of an industry for the benefit of the consumer, worldwide and in the US in particular.”

Also check out our interview with Siemiatkowski from last year.

As for its increased focus on the US; it makes sense. Klarna says it already powers more than 3,000 merchants in the US – including ASOS, Superdry, Sonos, Lulus and Toms – to help them increase new consumer acquisition, average order value and retention.

Overall, the company claims to serve over 60 million consumers and 130,000 merchant partners today, handling 1 million transactions on a daily basis and nearing $1 billion in annual revenue.

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