Klarna

Klarna was founded in 2005 by Sebastian Siemiatkowski, Niklas Adalberth and Victor Jacobsson after the founders developed an idea for simplifying online payments. The company was initially known as Kreditor and was supported by SSE Business Lab, the Stockholm School of Economics' start-up incubator. The early business idea centered around allowing consumers to receive goods before paying by taking on the role of credit and fraud risk for merchants.

Angel investor Jane Walerud became an early backer of the company, offering the founders SEK 600,000 for 10% of the company after seeing the idea presented and later connecting them with developers who helped build the platform. Erlang programming language was utilized in Klarna's early technical architecture, a point associated with Walerud's background at Erlang Systems.

In 2007, Investment AB Öresund invested in the company. Klarna subsequently expanded outside Sweden, first to Norway, Finland and Denmark, and later to Germany and the Netherlands. In 2009, the company changed the Kreditor name to Klarna.

In 2010, Sequoia Capital invested in Klarna. In 2011, Klarna was listed by The Daily Telegraph among Europe's promising young technology companies. In May 2011, Klarna acquired Analyzd, an Israeli company specializing in online payments, risk management and fraud prevention. Later that year, General Atlantic led a $155 million investment round, joined by DST Global, to accelerate international expansion.

Klarna Checkout was launched in 2012 as an embedded checkout product for online merchants. By 2024, the product had a 40% market share in Sweden and over 20% across the Nordic region before the company sold the business that same year.

In 2013, Klarna acquired German online payments company SOFORT AG, operator of Sofortüberweisung, forming Klarna Group.

Klarna launched in the United States in 2015, which became one of the company's main growth markets. In the same year, Sweden's then Minister for Enterprise and Innovation, Mikael Damberg, described Klarna as one of Sweden's five "unicorn" technology companies, alongside Spotify, Mojang, Skype and King.

In June 2017, Klarna received a full banking license from the Swedish Financial Supervisory Authority. …

Klarna operates a digital payments and commerce network connecting consumers and merchants. Its main product lines include Pay Now, for immediate payments and everyday spending; Pay Later, a short-term zero-interest credit product; and point-of-sale installment financing for larger purchases. Klarna also offers cards, banking and savings features in selected markets, checkout and payment infrastructure for merchants, shopping discovery tools, advertising products and retail marketing services.

Klarna's original model was built around invoice-based payment after delivery. In this model, the consumer could complete a purchase without entering card details and pay after receiving the goods, while Klarna processed the payment and took on part of the merchant's credit and fraud risk. Historically, the company's services included products such as Klarna Invoice, Klarna Account, Klarna Checkout and Klarna Direct; these product names and local implementations varied by country and over time as the company broadened its banking and payment offerings.

The company describes its credit discipline as based on short loan durations and real-time re-underwriting of transactions. In its first-quarter 2026 results, Klarna said it had underwritten about $0.5 trillion over 20 years and that its provisions for credit losses were 0.55% of GMV in Q1 2026, compared with 0.54% in Q1 2025. Its 2025 IPO filing also emphasised proprietary data and automated credit underwriting capabilities derived from transaction data on its network.

In June 2024, Klarna announced the sale of Klarna Checkout to a consortium led by BLQ Invest and described the transaction as part of a refocus on flexible payment methods distributed through multiple payment service providers. In 2025 and 2026, the company highlighted distribution partnerships with payment service providers such as Stripe and Nexi, and said JPMorgan Payments and Worldpay were expected to go live as partners.

Klarna Group plc is incorporated in England and Wales, with a registered office at 10 York Road, London. Klarna Bank AB is a Swedish limited liability company and authorised bank supervised by Finansinspektionen; Klarna's UK subsidiary, Klarna Financial Services UK Limited, is authorised and regulated by the Financial Conduct Authority for e-money and consumer credit activities.

The board of directors is chaired by Michael Moritz. Sebastian Siemiatkowski, a co-founder of Klarna, is the chief executive officer. As of 2026, the group management team also included Niclas Neglén as chief financial officer, David Fock as chief product and design officer, Yaron Shaer as chief technology officer, David Sandström as chief marketing officer and David Sykes as chief commercial officer.

Klarna's Swedish banking entity has organisation number 556737-0431 and headquarters at Sveavägen 46 in Stockholm. The company's labour relations became a national issue in Sweden in 2023, when unions Unionen and Sveriges Ingenjörer announced strike action at Klarna's Stockholm headquarters; the strike was called off after Klarna agreed to join the financial-sector employers' organisation BAO and be covered by a collective bargaining agreement from 1 January 2024.

For the 2025 financial year, Klarna reported gross merchandise volume of $127.9 billion, total revenue of $3.5 billion and adjusted operating profit of $65 million. The company also reported 118 million active consumers and 966,000 merchants.

In the first quarter of 2026, Klarna reported GMV of $33.7 billion, revenue of $1.0 billion, transaction margin dollars of $389 million, operating income of $17 million, adjusted operating profit of $68 million and net income of $1 million. The company also reported that the Klarna Card had reached five million active users across 16 countries and that revenue per employee had reached nearly $1.4 million.

Klarna's buy now, pay later products have been subject to regulatory scrutiny in multiple jurisdictions. In the United Kingdom, government and parliamentary documents noted concerns that the rapid growth of interest-free BNPL products could cause consumer detriment, and the Financial Conduct Authority said deferred payment credit would enter FCA regulation from 15 July 2026. In 2022, the FCA also secured contract changes from several BNPL firms, including Klarna, after identifying potentially unfair or unclear terms.

In Sweden, the Swedish Consumer Agency contacted Klarna in 2014 after complaints that customers had received reminder fees and debt collection communications without first receiving an invoice; the agency also examined credit fees connected to partial payments. In Germany, the District Court of Bremerhaven ruled in 2022 that Klarna could not charge a flat €1.20 fee for an email reminder where it had not shown corresponding costs.

In December 2020, the UK's Advertising Standards Authority banned a Klarna Instagram influencer campaign, ruling that four posts had irresponsibly encouraged the use of deferred payment services to improve mood during the COVID-19 lockdown. In October 2020, Klarna mistakenly sent marketing emails to people who said they had not signed up for them, prompting the UK's Information Commissioner's Office to make enquiries.

In February 2020, German privacy specialists reported an autofill data issue at Klarna in which third parties could access address data, dates of birth and telephone numbers when they knew a customer's email address and postal code; the report said Klarna instructed merchants to turn off the autofill function temporarily. In May 2021, a technical incident in the Klarna app allowed some users to view data belonging to other customers for a short period. Klarna attributed the incident to human error, while Finansinspektionen later opened an investigation into a possible breach of bank secrecy rules.

In March 2022, the Swedish Authority for Privacy Protection imposed an administrative fine of SEK 7.5 million on Klarna Bank AB for shortcomings in its privacy information. In March 2024, a Swedish administrative court of appeal upheld the fine. …