A Klarna spokesperson announced that Chinese firm Ant Financial has bought a minority stake in the company. The said purchase was revealed to initiate a global e-commerce partnership between the two fintech companies.
Payment affiliate of Chinese e-commerce giant Alibaba, Ant Financial, has bought a minority stock with Swedish financial technology start-up Klarna. Last Wednesday, a spokesperson for the company announced that this signaled the partnership between the two firms that would offer shoppers interest-free financing paid by monthly installments.
The purchase consisted of a mixed primary and secondary share where the latter have already been acquired by existing investors of the firm.
According to a statement from Klarna's CEO Sebastian Siemiatkowski, the partnership would eradicate the common problem raised by consumers where it would take them too long to acquire the company's complex services when shopping online and offline.
Alipay, Ant Financial's mobile wallet subsidiary, has been working with Klarna in the past. The said partnership generated a payment platform in AliExpress, another Alibaba-owned entity, in offering financial services to e-commerce website's users.
Klarna, on the other hand, has also been recognized as a fully-regulated bank since 2017. It has acquired a license from Swedish regulators.
According to the company, the partnership would further the companies' collaborations with AliPay. Furthermore, it was revealed that UK investment bank Numis had been serving as a financial advisor to Klarna to push through with the deal.
The purpose of AliPay and Klarna's collaboration was to uphold a shared ambition to innovate superior shopping experiences. It was also to promote and inspire customers around the world to opt for a less-hassle method of acquiring financial services.
Last week, Klarna already announced that it had incurred a 1.1 billion Swedish krona loss in revenues and only generated to 7.2 billion krona for 2019. It has been recognized as a profitable fintech firm in the past with a privately held status. Its value of one billion USD in recent years had been mostly due to its lucrative deals with merchants such as Alibaba.
At present, Europe's most valuable fintech firm is bank Revolut that hit a 5.5 billion USD valuation in 2019 and has been gaining funding amounting to 460 million USD. The Stockholm-based group was also reported to be in competition with American fintech company Affirm. The latter has been participated by famous individuals in the US such as Swedish retailer H&M and rapper Snoop Dogg as its investors.
