FinTech News
Macy’s Invests in Swedish FinTech Klarna
When it comes to investment in FinTech, it’s typically various venture capital firms fronting the money. However, every once in a while, a different kind of investor steps up to the plate. That’s the case with Klarna, which just revealed a deal with a major U.S. department store chain.
This week, famed retailer Macy’s announced that it was investing in Sweden-based FinTech Klarna — although the size of the investment was not disclosed. As part of the deal, the department store has also signed a five-year deal that will allow Macy’s online shoppers to checkout using Klarna’s four-installment interest-free payment plan. In a statement regarding the agreement, Macy’s chief digital officer Matt Baer said, “With a strong focus on digital agility and innovation, Macy’s continually seeks strategic partnerships that enable us to provide our customers with the best possible shopping experience, We’re excited to embark on a long-term relationship with Klarna that will help us reach wider audiences looking for seamless alternative payment solutions that provide them with financial control and convenience.”
Founded in 2005, Klarna has seen impressive growth in recent years, now boasting 12 million monthly active users across 17 countries. Stateside, it recently began airing television ads and was included in one of T-Mobile’s “T-Mobile Tuesday” promotions just last week. While Klarna is already partnered with more than 200,000 retailers including Sephora, Groupon, The North Face, and others, users can also pay with Klarna by creating one-time-use cards to shop online.
Klarna’s deal with Macy’s comes just weeks after the company announced a $650 million funding round that gave them a post money valuation of $10.65 billion. As their press release points out, this makes Klarna the largest private FinTech firm in all of Europe and the fourth largest in the world. The round was led by Silver Lake, who joined previous investors such as Sequoia Capital, Dragoneer, Permira, Commonwealth Bank of Australia, Bestseller Group, and Ant Group. Also notable is that Klarna counts rapper Snoop Dogg among its investors as well.
While the implementation of Klarna’s “buy now, pay later” service may help Macy’s boost its online sales, there’s no question that the FinTech is the big winner in this deal. As Klarna continues to grow, it’s done an impressive job of finding high-profile partners that have brought awareness to the brand. Ultimately, although the Macy’s investment likely pales in comparison to its recent $650 million funding round, it’s another sign that the company is bound for big things. Because of this, don’t be surprised if Klarna keeps climbing up the list of the world’s largest FinTechs.
