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Klarna - Helping Europe's largest Fintech

Numis acts as exclusive adviser to Klarna, the largest Fintech company in Europe, on its $460m private growth round.

Klarna

Group overview

Klarna is a leading global disruptor of payments and banking, fully licensed bank and provider of smoooth retail services. The Company was co-founded in 2005 in Stockholm by CEO, Sebastian Siemiatkowski, with the aim of disrupting the multi-trillion dollar global consumer payments and retail banking market. Klarna allows consumers to pay when and how they want in a smoooth one-click purchase via their three key payment solutions:

Pay Now: Pay by card directly at checkout, no lengthy forms, no passwords

Pay Later: Either get up to 14 or 30 days to pay for a purchase or split the payment into three (or four in certain markets) equal, interest free payments

Slice it: Slice the cost of bigger purchases into monthly payments, from 6 to 36 months (interest charges apply)

 

Currently, Klarna provides payment solutions to 60 million consumers, welcoming 26 million new consumers during 2018. Klarna works with 130,000 merchants across 14 countries with retail partners including H&M, Adidas, IKEA, Expedia, Sephora, ASOS, Topshop, Ticketmaster, Zara, Nike, Sonos, H&M and Lufthansa. In 2018, Klarna successfully launched several new products such as a direct to consumer shopping app, the Klarna card and an enhanced in-store offering. 

Outside of developing payments solutions and a superior, end-to-end shopping experience, Klarna plans to broaden its product offering for both consumers and merchants to include neo-banking and platform solutions. In 2018, transaction volumes of SEK 252bn generating SEK 5.7bn net revenue and EBT of SEK 0.2bn. Net revenues grew at an annualised rate of 29% between 2015 and 2018. The Company currently employees 2,500 people and is backed by investors such as Sequoia Capital, Bestseller Group, Permira, Visa and Atomico.

Deal highlights: 

  • Raised $460m gross primary proceeds
  • Post money valuation of $5.5bn, ranking Klarna as the largest private fintech in Europe and one of the largest private fintechs globally
  • This funding will help Klarna to continue its rapid rise in the US market, where it is currently growing at an annual rate of 6 million new US consumers
  • The round was led by led by Dragoneer Investment Group, a leading San Francisco based growth-oriented investor
  • Commonwealth Bank of Australia, Australia’s largest retail and commercial bank, participated as part of an agreement forming an exclusive partnership for the Australian and New Zealand markets
  • Other investors in the round include HMI Capital LLC, Merian Chrysalis Investment Company Limited, Första AP-Fonden (AP1), IPGL, IVP and funds and accounts managed by BlackRock
  • Numis ran a competitive, structured process over 3 months to identify/target investors globally and guide them through due diligence, negotiation of transaction terms and documentation
  • Klarna and potential investors appreciated Numis’ “guiding hand” without being interfering, working alongside both client and investors. The approach was focussed on facilitation not intermediation
  • This represents a landmark adviser-led transaction in terms of scale of private funding round, fintech valuation, and attracting a group of new, high quality, late stage and cross over investors to the Klarna cap table
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