SoftBank to back Klarna in a round that values ​​it at more than $ 40 billion

Klarna, a European buy now pay later company, is close to landing a new round of financing with a valuation of more than $ 40 billion, according to a source familiar with the matter.

The investment is backed by SoftBank and many other investors, said the person, who asked to remain anonymous as details have not yet been made public.

The news, which is ahead of a possible blockbuster listing, was first reported Thursday by Business Insider.

The exact size of the investment round is unknown. However, it is expected to be less than the $ 1 billion Klarna raised in March, when it was valued at $ 31 billion, according to Business Insider.

SoftBank and Klarna declined to comment when contacted by CNBC.

Klarna is already listed as a portfolio company on SoftBank’s website through Vision Fund 2. Klarna is also backed by renowned investors such as Snoop Dogg and Ant Group of China.

If the deal goes through, Klarna will cement its place as Europe’s most valuable private tech unicorn, beating out companies like food delivery service Deliveroo and online payment processor Checkout, which reached a valuation of $ 15 billion in January.

Less than three hours after the funding round was first reported, Klarna CEO Sebastian Siemiatkowski announced on Twitter that the company had experienced a “self-inflicted incident.”

“It is very sad and frustrating to realize that we have had a self-inflicted incident, lasting 30 minutes, that affected the privacy of some of our users,” he said, indicating that the company may have experienced a data breach of some kind.

“All the attention of all colleagues to get things back to normal, take steps to prevent this from moving forward, and communicate widely,” added Siemiatkowski.

Sweden-based Klarna continues to grow rapidly more than a decade after its founding and has made significant progress in expanding to the U.S. Last year it received a huge boost due to increased demand for buy-now plans and pay later, fueled in part by coronavirus lockdowns that accelerated a shift to online shopping.

At the same time, the increased demand for buy-now-pay-later products has drawn scrutiny from regulators in the UK, who are poised to introduce tough new rules to govern the sector.

“With this product, we are challenging a massive industry that has overcharged consumers with overdraft fees, with interest-bearing terms of use,” Siemiatkowski told CNBC in February. “There are a lot of misconceptions in the UK, but when we get a chance to sit down with UK politicians … they get convinced and then switch sides.”

Klarna reached $ 1 billion in annual revenue for the first time last year, posting a record operating income of $ 1.2 billion. However, losses were also accelerated by 50% due to increased costs associated with international expansion, with Klarna’s net loss of approximately $ 109.2 million.

Klarna makes money by charging merchants a fee every time a customer makes a transaction. He says merchants who use his service often see increased sales as a result. The company is a regulated bank and is increasingly targeting retail banking in its home country as well as in Germany.

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