One of the largest Fintech companies in the world

Every day, 2 million transactions are made through Klarnas’ payment platform². This is one of the largest fintech in the world and the most influential company in Europe and a phenomenon that is gaining more and more traction among young people who choose to use the company’s app to pay for online purchases.

The company was established in 2005 in Sweden to enable a convenient and straightforward solution for paying for online shopping. Since then, it has become a unicorn valued at tens of billions, employing about 5,000 employees² and used by 145 million customers².

Flexibility in payment for purchases

The advantage for users of the Klarna app is the ability to buy now and pay later (Buy Now Pay Later) for purchases or split the payment into several payments – a phenomenon widespread in Israel but almost non-existent in standard payment methods throughout the rest of the world.

In being able to split payments or pay after experiencing the product, this flexibility has winked at buyers online and significantly increased the purchasing ability of many. With high-cost shopping, such as a new electrical appliance, furniture, or mobile phone – many could not pay all at once and give up with no choice. Klarna has created an alternative that allows them to fulfill the dream and buy interest-free, impacting their credit score.

The business model

Klarna’s business model is based on payment by the businesses that work with it. The businesses earn a customer base with more buying force that they would not have without Klarna and are willing to pay relatively high fees, which allows the company to generate revenue.

Currently, Klarna has more than 400,000 businesses working with it online and in-store in more than 45 countries around the world².

According to the company’s reports, when a store enables the use of Klarna – the value of the total purchase per customer increases by 41%, there is a 30% increase in conversions to purchases, and up to 40% more new customers. These figures highlight the strength of the company among buyers and the viability of the businesses to join the services it offers them.

Transforming to digital banking

Investors in Klarna’s various fundraising rounds include⁵: Sequoia Capital, Silver Lake, BlackRock, Bestseller Grou Commonwealth Bank of Australia, Dragoneer, Permira, Visa, Ant Group, and more.

In addition to its original operations, it was reported⁴ that in February 2021, Klarna launched digital banking services in Germany.

The company uses its app as a banking tool, where customers can open a bank account and get a Visa debit card. Users get a complete bank account with a German IBAN, and they can withdraw money, deposit, and debit the account.

According to this publication, Klarna plans to build a financial “super app,” which will give users complete transparency over their money and enable accounts for current use and savings. This means that Klarna will compete with other digital banks and have the core of its independent banking system.

Investment opportunity through Together

Despite being one of the largest companies in the world with its significant potential, Klarna is still a private company, and the possibility of joining it as a shareholder is almost impossible for private investors.

This is precisely where Together Investments’ solution comes in, allowing investors to enjoy Klarna’s success starting at $30,000 through a dedicated fund that buys Klarna shares from the company’s existing shareholders (through the secondary market). Investors join the fund as partners, thus enabling them to enjoy the company’s future success.