Klarna co-founder and CEO Sebastian Siemiatkowski Photo by John Phillips/Getty Images for TechCrunch

Swedish payments startup Klarna has announced $460 million in new equity funding that values it at $5.5 billion post-money, up from a $2.5 billion valuation in 2017. A $5.5 billion valuation makes Klarna the highest valued private fintech in Europe, and one of the highest valued in the world. Klarna says the new funding will enable it to further its growth in the US, where it’s adding 6 million new customers annually.

Klarna offers a “buy now, pay later” service that allows its customers to purchase stuff for full-price online and later pay back the money in installments to Klarna. In retrospect, Klarna is kind of a digital lender. Another well-known startup that offers a similar service is Affirm, a San Francisco-based firm led by PayPal co-founder Max Levchin, which recently raised $300 million at a $2.9 billion valuation.

Klarna CTO Koen Köppen image: Klarna

Klarna currently has more than 60 million customers, and says it’s “in sight” of hitting $1 billion in annual revenue. Klarna has partnered with more than 130,000 merchants, including 3,000 in the US. Such partnership is necessary for Klarna’s customers to be able to make purchases with any particular merchant. The Swedish payments company has done that with several well-known companies, to name a few: Spotify, Sephora, IKEA, Adidas, Expedia, Lufthansa, AliExpress, Nike, ASOS, H&M, Sonos, Toms, Bohoo, Abercrombie & Fitch, rue21 and more.

Klarna’s new equity funding was led by Dragoneer Investment Group, with participation from HMI Capital, IVP, BlackRock, IPGL, the Commonwealth Bank of Australia and more. The funding follows an earlier one in April that raised above Klarna’s $100 million target. This round included, Klarna has raised $1.2 billion in total funding, according to Crunchbase data.

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