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Klarna Fuels US Growth with Massive Elliott Investment
18 Nov
Summary
- Klarna will sell up to $6.5 billion in loans to Elliott Investment Management funds.
- The deal aims to significantly expand Klarna's buy-now-pay-later business in the U.S.
- Fair financing product sees 244% gross merchandise value growth in the U.S.
Swedish fintech giant Klarna has entered into a significant agreement to sell up to $6.5 billion of loans to funds managed by Elliott Investment Management. This two-year pact is a pivotal step in Klarna's strategy to broaden its footprint in the competitive U.S. buy-now-pay-later market.
The collaboration allows Klarna to offload a portion of its existing Fair Financing portfolio and subsequently transfer newly originated receivables. This forward flow agreement, backed by a $1 billion facility, enables Klarna to originate substantial loan volumes while retaining crucial consumer-facing functions like underwriting and servicing.
Klarna's fair financing product, which facilitates spreading large purchases into fixed monthly installments, has gained considerable traction in the U.S. The company reported a remarkable 244% growth in gross merchandise value for this product in the U.S., significantly outpacing its global growth.
