Payments firm Klarna is now worth £32billion after raising a fresh chunk of money to help fund its expansion.
The shopping credit business, popular with millennials in their 20s and 30s, pulled in £451.7million of new money from Softbank and US venture capital firms Adit Ventures, Honeycomb Asset Management and Westcap Group.
It means Klarna’s value has now ballooned from £22billion in March and £7.8billion last September, making it the second-highest valued unlisted financial tech firm in the world.
Whip round: Payments firm Klarna pulled in £451.7m of new money from Softbank and US venture capital firms Adit Ventures, Honeycomb Asset Management and Westcap Group
The company allows consumers who shop online to pay for their items in instalments, or to pay after their shopping arrives in the post so they have time to try it first.
But Klarna, which was founded in Sweden, has drawn criticism in the UK for luring young people into unsustainable debt.
MPs and regulators are worried shoppers use Klarna without thinking of the risks, and only realise months later that they are paying off debts they cannot afford.
Chief executive Sebastian Siemiatkowski argues that his company is a force for good, and that using Klarna, which does not charge interest or late payment fees, is far better than using a credit card.
Siemiatkowski, a father of three, said: ‘I’m very proud of the investors who are supporting Klarna’s ambition to challenge these outdated models to empower consumers with fair, transparent, and convenient products to help them bank, shop and pay each day.’
Klarna said that 1 per cent of the money it has raised from investors will be ‘directed to initiatives supporting planet health’.
The firm gets most of its money through partnering with retailers, whom it charges a fee – it works with more than 13,500 in the UK including Asos and H&M.
It has 90m users worldwide, with 14m in the UK, and last year its operating profit rose 44 per cent to £777million.