Klarna signed a global payment deal with Stripe ahead of its blockbuster IPO

Klarna has agreed a major new distribution partnership with fellow fintech unicorn Stripe to expand reach and add more merchants to its upcoming US listing.

With Klarna’s acquisition, the Pay Later (BNPL) service will be available as a payment option for merchants using Stroop payment tools in 26 countries, the two companies told CNBC on Tuesday.

This isn’t the first time Klarna and Stripe have teamed up. In the year In 2021, at the height of the fintech frenzy fueled by the Covid-19 pandemic, Stripe has announced that it will offer its Klarna BNPL plans to US corporate merchants.

BNPL’s plans are installment loans that allow a consumer to buy something online or in-store and then pay off their debt, either at a later date or in equal monthly installments. BNPL events have become a popular way for people to spread their daily shopping expenses.

The new tie-up with Stripe gives Clarina a big boost as it prepares for its hotly anticipated initial public offering. Klarna secretly filed for an IPO in the United States in November. The company can bring an estimated value of up to 20 billion dollars, he said Bloomberg News Report last year.

Klarna earns from fees paid by retailers on each transaction made on the platform. In order to give Klarna visibility as a payment option in its checking tools, Stripe earns a share of Klarna’s money from a given transaction.

Klarna declined to disclose the financial terms of the deal with Stripe.

“This is very important for Klarna,” David Sykes, Klarna’s chief business officer, told CNBC, adding that the company has doubled the number of new merchants in the three months since it began implementing the new integration with Stripe in October.

“We’ve added 100,000 new merchants by 2024 and we’re seeing the growth rate continue to increase with this deal.” He added.

Analysts recently valued Klarna, founded in 2005, at $15 billion. At the height of the boom in fintech stocks, the company in 2018 It has attracted an estimate of $46 billion in funding by 2021 led by SoftBank’s Vision Fund 2.

In the year By 2022, Klarna has made 85% of the company’s $6.7 billion in new funding.

The deal also has the potential to drive additional revenue for Stripe.

BNPL proponents cite these schemes as a way to increase the overall level of transactions, as consumers can buy more goods in a shorter window and then pay over a longer period.

In a study conducted by Stripe last year, businesses offering BNPL as a payment method generated up to 14% more revenue from increased conversions and achieved higher average order values.

“We’ve seen BNPL’s volume grow 172% on Stripe in the last year, which is much faster than any other major payment method,” Jane Grosser, CEO of Stripe, told CNBC, adding that the deal with Klarna is a “win-win.” “For both organizations.

Stripe has recently been speculated to be an IPO candidate — but the company, for its part, says it’s in no rush. The company, which fell victim to the decline in fintech prices, It reduced the company’s value from $95 billion in 2023 to $50 billion in 2021. It is reported As part of a secondary sale, it returned to $70 billion.