Klarna’s valuation soars with $460 million in new equity funding

Klarna raised another $460 million in fresh equity funding, pushing the Swedish company’s valuation to about $5.5 billion.

The influx of funds will go toward expanding the reach of Klarna’s point-of-sale instant-financing options at U.S. retailers, according to a Tuesday press release.

Klarna recently announced integrations with Abercrombie & Fitch’s U.S. and U.K. stores and also with H&M stores in the U.S., where shoppers will be able to use Klarna’s “Shop Now, Pay Later” feature through H&M’s app beginning this fall. Klarna in May launched a shopping app enabling users to apply Klarna’s short-term installment-loan terms to any online purchase.

More than 130,000 merchants worldwide offer Klarna, and 3,000 are in the U.S., Klarna said in the release.

The latest funding round makes Klarna the largest private fintech in Europe, according to Klarna’s press release.

“This is a decisive time in the history of retail banking. Finally, transparency, technology and creativity will serve the consumer, and there will be no more room for unimaginative products, non-transparent terms of use or lack of genuine care of one’s customers,” said Sebastian Siemiatkowski, Klarna’s co-founder and CEO, in the release. Siemiatkowski said Klarna is “edging closer” to an IPO, according to a report in the Financial Times.

Silicon Valley venture capital firm Dragoneer Investment Group led the funding round, with several participants including Commonwealth Bank of Australia, HMI Capital LLC and Merian Chrysalis Investment Co. Ltd., according to the press release.