Snoop Dogg-Backed EU Fintech, Klarna becomes most valuable
Swedish banking and payments startup Klarna, which counts Snoop Dogg as a minority shareholder and advertising partner, said Tuesday it has reached a $5.5 billion valuation, making it one of the largest private fintech companies in the world.
The post-money valuation follows a $460 million fundraising round led by investor Dragoneer Investment Group, according to the announcement. Klarna said it would use the funds to pursue growth in U.S. markets and Australia.
Klarna, a payment provider and bank, markets a payment system that acts as an alternative to traditional credit cards.
The company’s website says it offers consumers flexibility by allowing them to pay for purchases in four installments, without piling on added interest and hidden fees.
“Shop now. Pay later,” its U.S. homepage said.
The startup also markets a “smooth” shopping experience when using its app. The company partnered with rapper Snoop Dogg in January “in order to bring the company’s communication concept of ‘Smoooth’ to the next level,” according to the announcement at the time.
As part of the deal, Snoop Dogg became a minority investor and the face of the company’s “Get Smoooth” campaign, and he went by “Smoooth Dogg” for the ads, the January announcement said.
Other investors joined the rapper as stakeholders in this latest funding round, including San Francisco-based growth investor Dragoneer and the Commonwealth Bank of Australia, according to the announcement.
Klarna said the bank’s participation came with an agreement to establish an exclusive partnership for the Australian and New Zealand markets.
A Klarna representative declined to comment further on the terms of the partnership, citing a “blackout period” as the bank prepares its quarterly financial filings.
Klarna also plans to expand its footprint in the U.S. and expand its business-to-business services, a company representative told Law360. The company is currently partnered with over 3,000 U.S. merchants, including retailers rue21, Lulus and Toms, according to its website.
“This is a decisive time in the history of retail banking,” Klarna CEO Sebastian Siemiatkowski said in a statement, adding that the company was now “further empowered to play a role in this improvement of an industry for the benefit of the consumer, worldwide and in the U.S. in particular.”
A number of fintech and retail startups have garnered considerable funding recently. While the total value of financial technology deals in the first half of 2019 was lower than in the first half of 2018.
Companies such as mobile banking startup MoneyLion announced a $160 million funding round in July, shortly after securities trading platform Robinhood said it had brought in $323 million in a Series E funding round.
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Snoop Dogg-Backed EU Fintech, Klarna becomes most valuable
