Startups > Klarna

Klarna

Klarna helps online shoppers and merchants transact with flexible, interest-free payment options.

Venture Round $4.19B (pre-IPO); $5.56B including IPO proceeds total Founded 2005 Stockholm, Stockholms Lan 6923 employees

Klarna is a buy-now-pay-later (BNPL) platform that enables customers to split purchases into interest-free installments or pay within 30 days, while merchants get paid upfront. The platform serves e-commerce retailers globally and offers additional features like price comparison, cashback rewards, and price tracking. Klarna differentiates itself by not charging late fees on its popular 4-installment payment method and has integrated with 24 of the top 100 US retailers, more than any competitor.

Problem solved

E-commerce merchants lose sales due to payment friction and upfront payment requirements, while customers need flexible payment options that don't burden them with high interest or surprise fees.

Target customer

E-commerce merchants across all sizes seeking to increase average order value and conversion rates; online shoppers seeking flexible payment options without interest or late fees.

Website LinkedIn Crunchbase

Founders

Sebastian Siemiatkowski

CEO & Co-Founder

Started Klarna at age 23 after working in accounts receivable services at a factoring company; holds a master's degree from the Stockholm School of Economics.

Niklas Adalberth

Co-Founder

Co-founded Klarna and left in 2015 to focus on impact investing through his Norrsken Foundation.

Victor Jacobsson

Co-Founder

Co-founded Klarna and served as former CFO.

Funding history

Series A $2.2M March 2010 Led by Unknown · Unknown

Series B Unknown 2010 Led by Sequoia Capital · Unknown

Series C $155M 2011 Led by General Atlantic · DST Global

Late-Stage $460M 2019 Led by Dragoneer Investment Group · Commonwealth Bank of Australia, HMI Capital

Late-Stage $650M 2020 Led by Silver Lake, GIC · BlackRock, HMI Capital

Late-Stage $639M June 2021 Led by SoftBank Group Vision Fund 2 · Unknown

Venture Round $800M July 2022 Led by Unknown · Unknown

Debt $1.63B August 2025 Led by Multiple · Unknown

IPO $1.37B September 2025 Led by NYSE · Public markets

Total raised: $4.19B (pre-IPO); $5.56B including IPO proceeds

Industries

E-Commerce FinTech Payments Shopping

Pricing

Merchants pay transaction fees per customer payment (no annual fee); fees vary by merchant agreement and sales volume. Consumers can opt for Klarna Member ($3.49/mo) or Klarna Plus ($7.99/mo) subscriptions to waive service fees. Specific merchant pricing requires contacting sales.

Notable customers

H&M, Saks, Sephora, Macy's, IKEA, Expedia Group, Nike, Uber, Airbnb, and 400,000+ global retail partners

Integrations

Integrated with 24 of top 100 US retailers, available across 45 markets globally, integration with ChatGPT as pilot program

Website

klarna.com/

Competitors

Tabby

Regional competitor focused on emerging markets, particularly Middle East and North Africa.

Zip

BNPL competitor with similar installment offerings but different geographic focus and merchant partnerships.

PayPal

Broader payment ecosystem with BNPL options but primarily positioned as digital wallet and payments processor.

Square

Payment processing platform with less specialized BNPL focus; serves physical and digital merchants.

Sunbit

BNPL provider with different targeting and merchant partnership strategy.

Why this matters: Klarna is the largest BNPL fintech globally by total funding and recently became the largest NYSE IPO of 2025 at $19B valuation, demonstrating strong market validation despite the competitive fintech landscape. Its integration with ChatGPT and partnership with 850,000+ retailers positions it as a leader in shaping the future of e-commerce payments.

Best for: E-commerce merchants seeking to increase conversion rates and average order value, and online shoppers needing flexible, transparent payment options without hidden fees or high interest rates.

Use cases

Increasing average order value for online retailers

Merchants report a 23% increase in average order value when offering Klarna BNPL services. Customers are more willing to make larger purchases when they can split payments into interest-free installments, reducing cart abandonment.

Improving cash flow for merchants

Merchants get paid upfront by Klarna regardless of the customer's chosen payment plan, eliminating the need to wait for customer payments across multiple weeks or months. This ensures steady, predictable cash flow for businesses.

Flexible payment options for customers

Shoppers can choose between paying in 4 interest-free installments over 8 weeks, paying in full within 30 days, or financing over 6-36 months with interest. Additional features like price tracking and cashback rewards enhance the shopping experience.

Alternatives

Affirm Broader BNPL offering with longer financing terms; focuses heavily on consumer credit assessment.

Afterpay Competitor BNPL platform owned by Square; dominant in Australian and international markets.

PayPal Pay Later Integrated into PayPal ecosystem; better for merchants already using PayPal infrastructure.

FAQ

What does Klarna do? +

Klarna is a buy-now-pay-later platform that allows online shoppers to split purchases into interest-free installments, pay within 30 days, or finance over longer periods. For merchants, it provides a payment method that increases conversion rates and average order value while ensuring immediate payment to the seller.

How much does Klarna cost? +

Merchants pay transaction fees per customer payment (no annual fee); rates vary based on merchant agreement and sales volume. Consumers can subscribe to Klarna Member ($3.49/mo) or Klarna Plus ($7.99/mo) to waive service fees. Contact sales for customized merchant pricing.

What are alternatives to Klarna? +

Main alternatives include Affirm (broader financing terms), Afterpay (international competitor), PayPal Pay Later (integrated payment ecosystem), and Zip (similar BNPL offering with different merchant partnerships).

Who uses Klarna? +

Target customers are e-commerce merchants of all sizes seeking higher conversion rates, and online shoppers wanting flexible payment options. Notable customers include H&M, Nike, Sephora, Macy's, IKEA, Expedia Group, and Uber, with 400,000+ retail partners globally.

How does Klarna compare to Affirm? +

Klarna offers interest-free installment payments and doesn't charge late fees on its 4-installment option, while Affirm focuses on longer-term financing with more emphasis on consumer credit scoring. Klarna has more merchant partnerships (24 of top 100 US retailers) and operates in 45 markets globally.