Overview

Klarna is a Swedish financial technology company founded in Stockholm in 2005 by Sebastian Siemiatkowski, Niklas Adalberth, and Victor Jacobsson. Initially established as Kreditor, the business set out to simplify online shopping by allowing customers to receive goods before paying while Klarna managed payment processing, parts of the credit risk, and fraud risk for merchants. The company later adopted the Klarna name and expanded from invoice-based payments into a broader digital commerce and banking platform. The company’s best-known service is buy now, pay later, commonly abbreviated BNPL. Depending on market and eligibility, Klarna customers can pay immediately, pay after receiving an order, or divide a purchase into installments. Klarna has also developed card products, digital banking and savings features, shopping and price-comparison tools, merchant checkout infrastructure, advertising products, and retail marketing services. Its consumer proposition is built around convenience, flexible payment timing, transaction notifications, purchase management, and shopping discovery. Its merchant proposition combines payment acceptance with tools intended to improve conversion, provide financing options, and support customer acquisition. Klarna’s early growth came through expansion across the Nordic region and continental Europe. In 2011 it acquired Analyzd, an Israeli payments and fraud-prevention company, and later raised a major investment round led by General Atlantic. The 2013 acquisition of German payments company SOFORT AG created the Klarna Group and broadened its European payment capabilities. Klarna entered the United States in 2015, making the country one of its most important growth markets, and obtained a full Swedish banking licence in 2017. It subsequently strengthened its British retail-finance business through the acquisition of Close Brothers Retail Finance and expanded into loyalty, influencer marketing, price comparison, and shopping technology through acquisitions including Stocard, APPRL, and PriceRunner. Klarna became one of Europe’s most highly valued private technology companies during the technology investment boom. Its valuation rose sharply in 2021 after a SoftBank-led financing round, then fell substantially in 2022 as interest rates increased and technology valuations declined. The company responded with cost reductions, changes to its product and distribution strategy, and greater emphasis on automation and artificial intelligence. It sold Klarna Checkout in 2024 while continuing to distribute flexible payment products through external payment-service-provider partnerships. Klarna operates through a group structure that includes Klarna Bank AB, its Swedish banking subsidiary supervised by the Swedish Financial Supervisory Authority. The group has also used local entities and regulatory arrangements in markets such as the United Kingdom and United States. The company has faced continuing scrutiny over BNPL consumer-credit practices, privacy, data security, marketing, and anti-money-laundering controls. These issues reflect wider regulatory debate about the treatment of short-term, often interest-free consumer credit. Klarna remains an active international financial-services brand whose identity combines payments, credit, shopping technology, merchant software, and digital banking.

History

Klarna was founded in Stockholm in 2005 by Sebastian Siemiatkowski, Niklas Adalberth and Victor Jacobsson. Initially operating as Kreditor, it sought to simplify online commerce by separating the moment of purchase from the moment of payment. Consumers could receive goods and settle payment later, while merchants obtained a payment intermediary and reduced some of the friction associated with online checkout. The company expanded first through the Nordic region and then into continental Europe. In 2009, it adopted the Klarna name. External investment helped finance product development and international growth, with Investment AB Öresund and Sequoia Capital among the investors associated with the company’s early expansion. Klarna’s central proposition developed into a family of payment methods covering immediate payment, deferred settlement and instalment financing. A major structural change came when Klarna obtained authorization as a Swedish bank. Klarna Bank AB became the regulated banking subsidiary for relevant European activities, while the wider group continued to use additional local entities for international operations. The banking framework allowed Klarna to offer a broader range of financial products and to operate within the European Economic Area subject to banking supervision and consumer-credit rules. During the 2010s and early 2020s, Klarna expanded from checkout into a broader commerce ecosystem. It developed Klarna Checkout and Klarna Payments for merchants, promoted its consumer app as a shopping and payment destination, and added cards, comparison shopping, financing and open-banking capabilities. The group also pursued acquisitions and partnerships involving shopping comparison, travel planning, creator commerce and merchant distribution. Klarna’s international growth made buy now, pay later a prominent category in digital commerce, particularly among online retailers. The rapid expansion of BNPL also brought regulatory and reputational challenges. Critics argued that payment deferral can resemble consumer credit and may encourage spending if marketed as frictionless or consequence-free. In the United Kingdom, the Advertising Standards Authority banned a series of Klarna influencer posts in 2020 after finding that the material irresponsibly linked deferred payments with emotional wellbeing during lockdown. Klarna also faced questions about marketing consent after reports that some people received communications they did not believe they had requested; the UK Information Commissioner’s Office made enquiries. Klarna responded in part by emphasizing responsible use, consumer choice and support for clearer regulation. Its marketing has continued to combine product promotion with cultural partnerships and campaigns designed to make payment services part of the shopping experience. The current Klarna proposition spans regulated banking and credit activities, payment technology, merchant services and shopping tools. Because the group operates through multiple legal entities, Klarna Bank AB is best understood as the Swedish regulated bank within a wider international brand and corporate platform.

2022
PriceRunner acquisition
[2]Klarna official press pageklarna.com
Klarna acquires PriceRunner to reinforce its shopping-comparison proposition.
2021
Klarna Kosma is launched
[2]Klarna official press pageklarna.com
Klarna creates an open-banking sub-brand and business unit.
2020
UK advertising ruling
[3]ASA ruling on Klarna Bank ABasa.org.uk
The Advertising Standards Authority bans Klarna influencer posts that connected deferred payments with improving mood during lockdown.
2010
Sequoia Capital invests in Klarna
[1]Klarnaen.wikipedia.org
The investment supports the company’s product development and international expansion.
2009
The company adopts the Klarna name
[1]Klarnaen.wikipedia.org
Kreditor changes its corporate and consumer-facing name to Klarna as the business expands beyond its original market.
2005
Kreditor is founded in Stockholm
[1]Klarnaen.wikipedia.org
Sebastian Siemiatkowski, Niklas Adalberth and Victor Jacobsson establish the business that later becomes Klarna.

Products and positioning

A consumer-oriented digital bank and payments platform combining flexible credit, checkout infrastructure, shopping discovery and merchant technology.

Merchant checkout
Klarna Checkout
A checkout solution designed to let merchants present Klarna payment methods alongside other payment options. It is intended to streamline online checkout and support payment selection, customer authentication and transaction processing. Availability and technical configuration vary by market and merchant integration.
Merchant payment services
Klarna Payments
A set of payment and financing tools for merchants, including options that can let customers pay immediately, later or over instalments where available. The service is part of Klarna’s merchant-facing infrastructure and is marketed as a way to provide flexible payment choice at checkout.
Consumer credit
Buy now, pay later
Klarna’s best-known product family allows eligible customers to defer or divide payment for purchases. Products may include short-term pay-later arrangements, fixed instalments and longer financing. Terms, fees, credit assessment and consumer protections depend on the country and specific product.
Shopping and personal finance
Klarna app
A consumer application that combines payment management with shopping-related functions. Depending on market, it can provide purchase tracking, payment administration, product discovery, price comparison and access to Klarna payment options.
Open banking · 2021
Klarna Kosma
An open-banking platform and business unit created to package Klarna’s account connectivity and related infrastructure for external businesses and financial applications.

Controversies

2020
UK influencer advertising banned by the ASA
The UK Advertising Standards Authority ruled that several Instagram advertisements for Klarna irresponsibly presented deferred payment services as a way to improve people’s mood during COVID-19 lockdowns. The ruling required the advertisements not to appear again in the complained-of form.
Source
2020
Marketing-email consent enquiries
Klarna was reported to have mistakenly sent marketing emails to some people who said they had not signed up for them. The UK Information Commissioner’s Office made enquiries. The supplied material does not establish a final enforcement outcome.
Source

Marketing campaigns

2023That’s Smoooth
Global
A multimedia campaign starring Paris Hilton was produced with Hilton’s 11:11 Media. Films used a stylized Y2K-inspired setting and the phrase “That’s Smoooth” to present Klarna’s flexible payments and shopping-app features.
Outcome. The supplied announcement documents the launch but does not provide independently verified campaign performance figures.
Source
2021Drop your lockdown look. Get smooth again.
Global
Klarna partnered with A$AP Rocky on a campaign encouraging consumers to refresh their clothing after pandemic restrictions. Rocky appeared in social, online and out-of-home content and was described as taking a one-day CEO role and participating as a shareholder.
Outcome. The campaign included a social competition offering clothing from a vintage collection curated by A$AP Rocky; a broader commercial result was not supplied.
Source
2021Consumers, regulation and challenging stereotypes
United Kingdom
Klarna used billboards to challenge social and financial stereotypes and to state support for regulation intended to protect consumers using innovative payment services.
Outcome. The campaign publicly connected Klarna’s brand message with responsible spending and support for clearer BNPL regulation.
Source
2019No drama, just Klarna
United Kingdom
An outdoor campaign placed across six UK cities and worked with retail partners including ASOS, JD and Missguided. Short rhymes linked partner brands with Klarna’s payment options and framed payment flexibility as a smoother part of shopping.
Outcome. The campaign supported Klarna’s UK retail-partner positioning; no independently verified performance outcome is specified in the supplied material.
Source

Brand decisions

2022
Acquisition of PriceRunnerM&A
Background
Klarna was broadening its proposition from payments toward shopping discovery and comparison.
Action taken
The group acquired PriceRunner.
Aftermath
The acquisition strengthened Klarna’s shopping-comparison capabilities for its consumer platform.
Source
2021
Expansion into open bankingStrategy
Background
Klarna sought to extend beyond checkout and consumer credit into account connectivity and financial infrastructure.
Action taken
It launched Klarna Kosma as an open-banking business unit and sub-brand.
Aftermath
Open banking became a distinct component of the group’s business-to-business platform.
Source
2009
Rebrand from Kreditor to KlarnaStrategy
Background
The business was expanding beyond its original Swedish online-payment activity and needed a broader consumer-facing identity.
Action taken
The company adopted the Klarna name.
Aftermath
The Klarna brand became the platform identity used for its expanding payment and commerce services.
Source

Recent events

2023
Klarna launches a Paris Hilton global campaign[7]That’s Smooothklarna.com
Campaign
Klarna launched a multimedia campaign with Paris Hilton and her 11:11 Media company, using the phrase “That’s Smoooth” to promote flexible payments and shopping-app features.
2022
Klarna acquires PriceRunner[2]Klarna official press pageklarna.com
M&A
The group acquired PriceRunner to strengthen shopping comparison and broaden the proposition available to its users.
2021
Klarna launches Klarna Kosma open-banking unit[2]Klarna official press pageklarna.com
Product launch
Klarna introduced Klarna Kosma as a sub-brand and business unit for its open-banking platform.
2021
Klarna and Stripe announce a strategic partnership[2]Klarna official press pageklarna.com
Other
Klarna and Stripe announced a partnership intended to expand access to Klarna payment methods for merchants.
2020
Klarna launches a global Consumer Council[2]Klarna official press pageklarna.com
Other
Klarna announced a consumer council intended to provide feedback on its products and consumer-facing practices.