Klarna Bank Seeks to Raise Funds at Lower Valuation

Klarna Bank AB is planning to raise new funds that can be valued at nearly one-third of the $46 billion valuations that FinTech giants achieved a little less than a year ago. Klarna specializes in Buy-now-Pay-Later services. 

This is a popular type of cash advance that competes with credit cards and allows customers to pay in installments for goods and services without paying interest. Klarna makes money by charging the merchants who provide Klarna's services.

Klarna became Europe's most valuable fintech startup in June when SoftBank Group Corp.'s Vision Fund 2 emerged and led a $45.6 billion investment in the company.

The Sweden-based settlement company aims to raise up to $1 billion from new and existing investors in transactions that can be valued as low as $30 billion after cash injection. It marks a drop of about 30% from the previous round.

In 2019, Klarna, which includes Sequoia Capital, Silver Lake, and Dragoneer Investment Group LLC as investors, was worth nearly $3.5 billion, according to PitchBook data.