Klarna preps for tough competition with $35m debt financing

Sweden’s Klarna has raised SEK300m ($35m) in its first subordinated unsecured bond issue as it prepares to battle tough fintech competitors globally.

The e-commerce fintech company said it had turned to the debt financing in a move to diversify its sources of funding and strengthen its capital base.

Klarna Treasurer Hannes Wadell called the new issue “the first small step to a wider presence in the debt capital markets”.

The company aims to simplify online shopping by offering payment services for online stores, assuming the risk over stores’ claims for payments from customers.

Klarna converted to a listed from a private company in order to be able to carry out debt securities issues.

The bonds, due in 2026, were sold to a group of large Nordic investors at an initial coupon rate of 4 per cent.

Klarna is looking to grow its international presence in the future, especially in the US, where it is bound to face strong competition from global payments major Paypal as well as other fintech players.

The payments segment of the fintech market has been identified by many investors as the most promising in terms of rapid growth potential.

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