Industry News

“Visa takes a strategic stake in Klarna, the finance startup out of Sweden”

Finance sites (Bloomberg, FT), the Fintech press and TechCrunch have all reported on Visa’s investment in Renovata client, Klarna.

Backed by Atomico and Sequoia Capital among others, Klarna is a unified payments processing and consumer financing operation, valued at around $2.25B. The terms of the agreement have not been released, but TechCrunch notes that Visa has form in backing promising entrants jostling in the unpredictable fintech market, having put money into Square and Stripe too.

The problem has always been that establishing credibility in financial services, with its complex regulatory regime and huge customer inertia has always been tough. Fintech innovators have therefore usually concentrated initially on a single thin segment of the market (international transactions, payment processing, etc.). With deep pockets and world-class talent, Klarna is proving to be capable of breadth – the company now has a banking license.

TechCrunch notes that the partnership is as strategic as it is commercial, with both sides looking to use technology (NFC, push payments, new authentication methods) to make the customer-facing element of payments “smooth, seamless and safe… across platforms and channels”.

Read the full article here: