STOCKHOLM — Klarna, the BNPL provider that has quickly become a significant competitor to credit unions in the financing space, said it has secured a $26 billion funding agreement with financial services and investment firm Nelnet.
Under the multi-year deal, Klarna will sell up to $26 billion in receivables from its “Pay in 4” installment program to Nelnet.
“This is a landmark transaction for Klarna in the U.S.,” Niclas Neglén, Klarna’s chief financial officer, said in a statement. “Our partnership with Nelnet allows us to scale a core product responsibly, while continuing to deliver smooth, interest-free payment experiences to millions of consumers.”
‘Flow-Forward Structure’
Klarna said the arrangement will support the ongoing expansion of Pay in 4 in the U.S. and highlighted the deal’s “flow-forward” structure as a sign of its ability to execute large-scale capital markets transactions. The company said it will continue to originate and service all receivables under the program, it said, ensuring continuity for consumers and merchants.
The announcement came on the heels of Klarna’s second-quarter earnings, which showed revenue growth accelerating to 20% year-over-year, up from 15% in the first quarter. Growth in the U.S. was especially strong, with revenues climbing 38% year over year.
New Launches Piloted
In the second quarter, Klarna launched a U.S. pilot of its enhanced Klarna Card, began powering Walmart’s OnePay Later service and extended its partnership with eBay to the U.S. It also announced upcoming collaborations with Worldpay, Nexi and JPMorgan Payments.
‘Growing Influence’
Meanwhile, new research from PYMNTS Intelligence highlighted the growing influence of buy now, pay later services such as Klarna. The report found that 43% of consumers would skip a payment or purchase altogether without BNPL options, while 42.4% said they would opt for a cheaper product or service.
Another 35.1% said they would complete the payment but delay other bills.
The research also ranked major players in the U.S. BNPL market, showing Klarna with the largest share at 26.2%, followed by Afterpay at 21.9% and Affirm at 19.3%.
