Klarna was founded in 2005 by Sebastian Siemiatkowski, Niklas Adalberth, and Victor Jacobsson in Stockholm, Sweden. It started as a payment solution for Swedish e-commerce and gradually expanded into one of Europe’s most prominent fintech companies. Klarna popularized the “buy now, pay later” (BNPL) model that has since been copied by dozens of competitors.
The service works simply: shoppers split purchases into interest-free installments (usually four payments over six weeks), while merchants get paid upfront. Klarna takes on the credit risk and earns revenue from merchant fees and late payment charges.
Klarna serves over 150 million active users and partners with 500,000+ merchants, including major retailers like H&M, Nike, Sephora, and ASOS. The company processes around $80 billion in annual gross merchandise volume.
After peaking at a $45.6 billion valuation in 2021, Klarna’s valuation dropped dramatically to $6.7 billion in a 2022 down round as rising interest rates hit BNPL companies hard. It has since recovered significantly, and the company filed for a US IPO in late 2024.
Klarna has been aggressive about AI adoption, claiming its AI customer service agent handles two-thirds of all customer service interactions, replacing the work of 700 full-time agents. The company has also expanded beyond BNPL into a broader shopping app with price comparison, deal tracking, and a loyalty program.
Headquartered in Stockholm with offices worldwide, Klarna employs around 5,000 people after significant layoffs in 2022.
