Ant Financial Acquires Minority Stake In Klarna

China’s Ant Financial has acquired a minority stake in the Swedish split payments FinTech Klarna for an undisclosed sum, Klarna announced on Wednesday (March 4).

The stake amounts to less than 1 percent and was made up of existing and new shares, Reuters reported, citing sources. Another source said the stake was done at a “slight uptick” to Klarna’s $460 million funding round last August, which valued the startup at $5.5 billion

The acquisition deepens the strategic partnership between the two firms. Klarna’s buy now, pay later (BNPL) app is already part of AliExpress, the international shopping platform run by e-commerce giant Alibaba Group, an affiliate of Ant Financial.

Klarna, Europe’s most valuable FinTech, was founded in 2005 and has financial backers that include the rapper Snoop Dogg, who is also part of the company’s marketing. Other investors include venture capital firm Sequoia Capital and Australia’s biggest bank, Commonwealth Bank of Australia.

Ant Financial is China’s biggest firm in the $27 trillion Chinese payments market and is expanding into consumer lending.

“For too long consumers have had to endure non-intuitive, boring and overly complex services when shopping both online and offline. At the heart of this cooperation between Klarna and Alipay is a shared ambition for innovating truly superior shopping experiences and creating destinations of inspiration for consumers across the world,” said Sebastian Siemiątkowski, CEO, Klarna.

“Alipay, and the wider Alibaba Group, have truly set the global pace on retail innovation and the app economy. We are delighted in this confidence shown in Klarna to definine the future of payments and shopping and are very much looking forward to working together further in the future,” he added. ​

Klarna works with more than 200,000 retailers and eCommerce platforms globally including AliExpress, H&M, ASOS, Expedia Group, IKEA, Farfetch, Adidas, Spotify, Samsung and Nike. Klarna added over 75,000 new merchants last year. The app has been downloaded over 200,000 times more than its closest U.S.rival.

Klarna raised $460 million in August for a total of $1.2 billion. The company has 3,000 employees in 17 countries.