Australian Commonwealth Bank increases stake in late payment fintech Klarna
Jan. 30 (Reuters) – The Commonwealth Bank of Australia said on Thursday it had increased its stake in Swedish company Buy Now, Pay Later (BNPL) Klarna with a $ 200 million investment and launched the payment provider’s services in Australia .
Klarna is also backed by Sequoia Capital and rapper Snoop Dogg and Australia’s largest bank will now own a 5.5% stake in the company, having made an initial investment of $ 100 million last year.
CBA Managing Director Matt Comyn said the decision to increase participation allows it to “meet growing consumer demand for a new payment option” and to tap into Klarna’s international operations.
The bank will own half of Klarna’s operations in Australia and New Zealand and will have the right to partner with the Swedish company in Indonesia.
CBA’s investment comes as BNPL companies, which offer consumers a simpler alternative to credit cards with small payment loans, gained popularity among millennials.
But these companies, including Bellwether Afterpay Ltd, have also come under intense regulatory scrutiny, with some suggesting that the business model should be treated with the same scrutiny as bank lending.
Founded in 2005, Klarna has more than 85 million customers using its service to purchase goods and services from 200,000 merchants, CBA said. Its last round table in August valued fintech at $ 5.5 billion. (Reporting by Nikhil Kurian Nainan in Bangalore; Editing by Sriraj Kalluvila)