Israeli-Swedish startup raises $155M
Klarna's mega financing round led by DTS and Sequoia funds, invested in companies like Facebook, Google and Twitter. E-trading company to expand its R&D center in Tel Aviv from 20 to 50 employees
The round was led by Russian businessman Yuri Milner's investment fund DST, mainly known for its investments in Facebook and Twitter, as well as for the acquisition of ICQ from US AOL two years ago.
Other investors were– the Sequoia VC fund and General Atlantic – a Facebook investor as well.
The mega-round aimed to catapult Klarna – which has thus far raised a total of €8.6 million (about $11.5 million) – to a leading position on the global online payments market by expanding its operations in Europe.
The company's head of R&D in Israel, Yuval Samet, explained that the company planned to recruit another 30 employees in addition to its 20 employees in its new R&D center in Tel Aviv.
Klarna doubles its revenue each year and is growing at a high rate by competing with PayPal and other online payment systems with its revolutionary product, which allows customers to pay for products ordered online only after they had received the product they ordered.
Costumers don't have to enter their credit card details when ordering, and customer credibility is assessed by sophisticated algorithms.
Klarna explains that the first purchase is the riskiest, but later on the probability that returning customers will pay grows. The service was launched in Sweden and later on introduced in Norway, Finland, Denmark, and more recently in Germany.
In a past interview to Calcalist, Klarna CEO Sebastian Siemiatkowski said that, as oppose to PayPal, "we work in a reverse manner: You get the product, and only if you're satisfied with it you pay within two weeks.
"This way we also spare customers the tortuous process of entering their credit card payments for products that might not even arrive."
Last May, Klarna acquired Analyzd, founded by Yuval and Ohad Samet. Following the acquisition, the Swedish company opened its first R&D center outside Sweden and appointed Uri Nativ as the company's head of R&D and Yuval Samet as director of the new center in Tel Aviv.
Siemiatkowski says that in the countries in which the company does business, some 40% of the sales of its channel partners are made through the Klarna system.
Klarna operates exclusively in Europe and has some six million subscribers who have purchase $2.5 billion of products through the payment system. The company's earnings this year are estimated at $120 million.
Yuval Samet told Calcalist that despite the current financial climate in Europe, the company's sales have not been affected.
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