It’s all about putting pressure on peers as Klarna and ID-Pal have reeled in tech funding.
Fintech firm Klarna has closed a new $800 million (£675 million) financing round giving it a $6.7 billion (£5.6 billion) post-money valuation, down from $45.6 billion (£38.5 billion) a year ago.
ID-Pal, an identity verification provider, announced a €7 million (£6 million) Series A funding round to fuel expansion into unspecified international markets.
Klarna Stays Upbeat
Klarna is a buy now, pay later (BNPL) company based in Stockholm, with a presence in the UK, US and elsewhere.
The firm is well aware of the bigger scene and points out that it “has not been immune to the significant downdrafts of fintech stock in public markets”. In a dig at any rivals, it says its peers are down 80-90% vs peak valuations and “consequently the adjustment in Klarna’s valuation is on par with its public peers”.
Sebastian Siemiatkowski, CEO of Klarna, puts on a brave face: “It’s a testament to the strength of Klarna’s business that, during the steepest drop in global stock markets in over fifty years, investors recognised our strong position and continued progress in revolutionising the retail banking industry.”
The funding came from existing investors including Sequoia, the founders, Bestseller, Silver Lake and Commonwealth Bank of Australia. First-time investors include Mubadala Investment Company and Canada Pension Plan Investment Board. The financing will primarily be used to boost its activities in the US.
In the US, Klarna has close to 30 million users and works with 30 of the top 100 US retailers “more than Affirm and Afterpay combined”. In terms of the UK, volume has grown by close to 8x since 2018, reaching 18 million consumers from four million in 2018 representing a 333% increase, with 22,000 retail partners.
It’s not just focusing on BNPL. In March, Klarna tapped into the open banking craze with a new sub-brand and business unit. Called ‘Klarna Kosma’, the retail bank, payments and shopping service is looking to create its own profitable cosmos.
ID-Pal Has Ideas
Dublin-based ID-Pal, which made its formal entry into the UK market in May, targets businesses in more than 30 sectors, across Ireland, the US, EU and the UK.
The funding round was led by Inspire Investments with Act Venture Capital, who have now participated in ID-Pal’s last two rounds. ID-Pal will use the funding to “scale its global sales and marketing efforts”.
The company is in a good mood and explains that the Series A comes off the back of a “significant period of growth” with both employee and customer count doubling over the past 12 months.
Customers include One4all, Zurich, Elavon, Trident Trust, BDO, American National University, and the recent JP Morgan-acquired Global Shares. It also has partnerships with firms like HID Global, RiskScreen, Sherpa Technologies, Temenos and Vesta.
ID-Pal helps businesses with anti-money laundering (AML) and know your customer (KYC) compliance. Its ISO 27001 certified solution performs document verification, facial matching, liveness testing and address e-verification in real-time.
