Klarna Partners with Walmart to Enhance Buy Now, Pay Later Options
As Klarna, a noteworthy fintech startup in the Buy Now, Pay Later (BNPL) sector, prepares for a potential public offering in the United States, it has recently announced a significant partnership with Walmart. This collaboration positions Klarna as Walmart’s exclusive installment loan partner in the U.S.
Partnership Overview
In a recent announcement, Klarna stated it will collaborate with One Pay, a consumer finance app, to provide Walmart customers with the option to make purchases on an installment basis. This service will cover a wide range of products, including electronics and home goods.
Klarna’s CEO and co-founder, Sebastian Siemiatkowski, expressed enthusiasm about this partnership, stating, “Choosing Klarna as our exclusive installment loan partner at Walmart in the US is a huge vote of confidence as we pursue our goal of being available anywhere for everything.”
Impact on the Market
This strategic partnership potentially limits the offerings of Klarna’s main competitor, Affirm, which had previously partnered with Walmart. Affirm’s collaboration with Walmart dates back to 2019, meaning this shift could significantly affect its customer base. The global BNPL market is expected to grow considerably, with projections estimating it to reach $1,226 billion by 2025.
Features of Klarna’s New Offer
As part of this integration, One Pay will allow Walmart customers to access contactless payments while also enabling Klarna’s installment loans as a checkout option. Customers will have the flexibility to select repayment plans ranging from 3 to 36 months, enhancing their purchasing choices.
Klarna’s Financial Standing and Future Plans
On the financial front, Klarna recently filed its first public prospectus, indicating plans to list on the New York Stock Exchange under the ticker symbol “Klar.” While specific numbers regarding shares and pricing remain undisclosed, the prospectus reveals that Klarna has 93 million active users and generated $2.8 billion in revenue as of December 31, 2024.
The company experienced a substantial decline in valuation, dropping from $46 billion in 2021 to approximately $6.7 billion in 2022. However, it has shown signs of recovery with recent profitability and is now valued around $15 billion.
Workforce Adjustments
In recent years, Klarna has also seen a reduction in its workforce, decreasing from about 5,000 employees in 2023 to 3,800 by 2024. Siemiatkowski has indicated a hiring freeze, opting not to replace employees who leave.
Conclusion
Klarna’s innovative partnership with Walmart marks a significant milestone in the BNPL landscape, potentially reshaping customer experiences and market dynamics. As the company prepares for its public launch, the collaboration reinforces its commitment to expanding accessibility to payment options.
