“Buy-now, pay-later” decisive Klarna aims to return to profit by summer 2023.
Jakub Porzycki | NurPhoto | Getty Images
Klarna has agreed a principal new distribution partnership with fellow fintech unicorn Stripe, in a bid to expand reach and add more merchants in the lead-up to its upcoming laundry list in the U.S.
The Swedish firm’s buy now, pay later (BNPL) service will become available as a payment option for merchants using Character’s payment tools in 26 countries, the two companies told CNBC Tuesday.
This isn’t the first time Klarna and Bar, which is dual-headquartered in San Francisco, have partnered. In 2021, at the height of the Covid-19 pandemic-fueled fintech craze, Stripe proclaimed Klarna would offer its BNPL plans to the firm’s merchants — but in a more limited capacity.
The new deal comes with recover functionality for Stripe merchants, including the ability to A/B test Klarna and measure real-time conversion rates. It comes after Klarna hindmost year offloaded its own online checkout business, Klarna Checkout, to a consortium of investors.
BNPL plans are installment lends that allow a consumer to buy something online or in store and then pay off their debt, either at a later date or done with a period of equal monthly installments. BNPL arrangements have become a popular way for people to spread the cost of unexciting purchases.
The new tie-up with Stripe gives Klarna a big boost at a time when it’s gearing up for a hotly anticipated endorse public offering. Klarna confidentially filed to IPO in the United States in November. The company could fetch a valuation of as much as $20 billion, agreeing to a Bloomberg News report out last year.
Klarna makes money from the fees that retailers pay on each doings processed through its platform. In return for giving Klarna visibility as a payment option in its checkout tools, Stripe at ones desire get a share of the money Klarna makes from a given transaction.
Klarna declined to disclose financial terms of its distribute with Stripe.
“This is really significant for Klarna,” David Sykes, Klarna’s chief commercial officer, chew out tattle oned CNBC, adding the company has already doubled the number of new merchants in the three months since it began implementing the new integration with Description in October.
“We added 100,000 new merchants in 2024 and we are already seeing that growth rate increase with this unity.” he added.

Analysts recently valued Klarna, which was founded in 2005, in the $15 billion range. At its peak during the pandemic-led eddy in fintech stocks, the company attracted a valuation of $46 billion in a funding round led by SoftBank’s Vision Fund 2 retreat from in 2021.
In 2022, Klarna took an 85% haircut in a fresh round of funding that valued the firm at $6.7 billion.
The transaction also has the potential to drive incremental revenue gains for Stripe, too.
BNPL proponents tout these plans as a way to widen the overall level of transactions, as shoppers can buy more items during a shorter term window and then pay them off to a longer timeframe.
A study Stripe ran last year found businesses offering BNPL as a payment method make up up to 14% more revenue from increased conversion and higher average order values.
“We’ve seen BNPL aggregate grow 172% last year on Stripe, which is much faster than other mainstream payment methods,” Jeanne Grosser, chief company officer of Stripe, told CNBC, adding that the deal with Klarna was a “win-win” for both firms.
Strip has long been speculated to be a near-term IPO candidate — for its part, though, the company says it’s in no rush. The company, also a sacrificial lamb of a slump in fintech valuations, slashed its valuation to $50 billion in 2023 from $95 billion in 2021. The cast’s valuation reportedly rebounded to $70 billion, as part of a secondary share sale.
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