Klarna Nearing IPO Wins Fintech Partnership from Affirm

Swedish Fintech Firm Klarna to Be Exclusive Provider of Buy Now, Pay Later Loans for Walmart

Swedish fintech firm Klarna will be the exclusive provider of buy now, pay later loans for Walmart, taking a coveted partnership away from rival Affirm, CNBC has learned. The deal comes at an opportune time for Klarna as it readies one of the year’s most highly anticipated initial public offerings.

According to people with knowledge of the situation, Klarna will provide loans to Walmart customers in stores and online through the retailer’s majority-owned fintech startup OnePay. OnePay will handle the user experience via its app, while Klarna will make underwriting decisions for loans ranging from three months to 36 months in length, and with annual interest rates from 10% to 36%.

The new product will be launched in the coming weeks and will be scaled to all Walmart channels by the holiday season, likely leaving it the retailer’s only buy now, pay later option by year-end.

Deal Sweetener

The deal is a "game changer" for Klarna, according to CEO Sebastian Siemiatkowski, who has worked to improve the company’s prospects, including touting its use of generative AI to slash expenses and headcount. The company returned to profitability in 2023, and its valuation is now roughly $15 billion, according to analysts, nearly matching the public market value of Affirm.

Everything App

The deal is no less consequential to Walmart’s OnePay, which has surged to a $2.5 billion pre-money valuation just two years after rolling out a suite of products to its customers. The startup now has more than 3 million active customers and is generating revenue at an annual run rate of more than $200 million.

Conclusion

Klarna’s partnership with OnePay is a significant win for the Swedish fintech firm, which is poised to become the exclusive provider of buy now, pay later loans for Walmart. The deal comes at a time when Klarna is preparing to go public, and the company’s valuation is likely to benefit from the partnership. For Affirm, the move is likely to be seen as a blow at a time when tech stocks are particularly vulnerable.

Frequently Asked Questions

Q: What is the nature of the partnership between Klarna and OnePay?
A: Klarna will provide loans to Walmart customers in stores and online through OnePay’s app, while OnePay will handle the user experience and Klarna will make underwriting decisions for loans.

Q: How long will the loans offered by Klarna through OnePay range in length?
A: The loans will range from three months to 36 months in length.

Q: What is the interest rate range for the loans offered by Klarna through OnePay?
A: The annual interest rates will range from 10% to 36%.

Q: When will the new product be launched?
A: The new product will be launched in the coming weeks and will be scaled to all Walmart channels by the holiday season.