'Buy now, pay later' fintech Klarna to enter new markets in 2020

Swedish financial technology company Klarna plans to launch in Australia and other markets in 2020 after a strong start for its ‘buy now, pay later’ service in the United States, CEO Sebastian Siemiatkowski told Reuters.

Klarna, which was valued at $5.5 billion in an August funding round that raised $460 million, is also beefing up a key tech hub in Berlin as it extends its coverage and introduces new products for users and merchants.

“We are winning a new merchant every eight minutes,” Siemiatkowski said in a written interview. “Since the beginning of 2019 we have enlarged our merchant base by over 60,000 merchants to over 190,000 today.”

Klarna, founded in 2005 by Siemiatkowski and partners, puts up payment for goods on behalf of a consumer, offering a range of options to settle the balance over the course of a few weeks.

That approach has proved to be popular among millennials who prefer debit cards to credit cards, helping Klarna to become the most valuable European ‘fintech’ company at the time of its latest funding round.

In the United States, Klarna says it is adding users on its shopping app at an annual rate of 6 million.

“We are on a very exciting journey from a Scandinavian payment provider to a global shopping ecosystem,” Siemiatkowski said.

The company, which employs a total of 2,500 staff worldwide, is bringing 500 of them under one roof at a Berlin tech hub that will open in the New Year to focus on product, engineering and commercial growth.

With digital transactions becoming increasingly commoditized, Klarna wants its app to offer more personalized features including price-drop notifications, delivery tracking, and a financial overview for its users.

“The Klarna app will transform more and more into a one-stop shopping and financial management destination,” said Siemiatkowski.