Payments firm Klarna is Europe’s top fintech after £4.5bn valuation

Payments firm Klarna has become Europe’s most valuable fintech company after a fundraising round made it worth 5.5 billion US dollars (£4.5 billion).

The company, which works with retailers such as Asos and Superdry to provide different payment options for customers, raised 460 million dollars (£378 million).

It puts the Stockholm-founded business ahead of both Monzo and TransferWise, which are both worth around 3.5 billion dollars (£2.9 billion).

The funding, led by San Francisco investor Dragoneer, will power the company’s growth in the US market, where it has seen increasing pickup from consumers.

Other backers included Commonwealth Bank of Australia, HMI Capital LLC, and funds and accounts managed by BlackRock.

Sebastian Siemiatkowski, co-founder and chief executive of Klarna, said: “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.

“We, all 2,500 of us at Klarna, are humbled and honoured, and now also further empowered, to play a role in this improvement of an industry for the benefit of the consumer, worldwide and in the US in particular.”

Klarna, which was founded in 2005, offers options which include paying now, paying later or paying over time, aimed at making online shopping smoother for customers.

The latest announcement comes a day after Klarna announced the expansion of its partnership with British website Asos, making its flexible payment options available to the US market.

Other brands including H&M, Abercrombie & Fitch and Boohoo are also set to go live with Klarna.