Klarna Bank AB is looking to get out of the checkout business after the financial technology giant found the unit created a conflict of interest with peers like Adyen or Stripe.
An investor consortium led by the serial entrepreneur Kamjar Hajabdolahi has agreed to acquire the Checkout business in a deal that values the unit at 5.4 billion kronor ($700 million), according to documents obtained by Bloomberg News.
Klarna has long offered merchants two ways of offering its payment options to their customers. With Checkout, a retailer could work directly with Klarna to make the company’s offerings available on their site. But merchants could also work with payment service providers, like Stripe or Adyen, to make Klarna’s offerings available.
That has meant that those players have been both friend and foe to Klarna. On the one hand, Klarna wants to work with them to ensure its offerings get prime placement within their ecosystems alongside rivals like Apple Pay or PayPal. On the other hand, Klarna was competing with them directly to offer the Checkout solution to merchants.
For years, Klarna has sought to focus more on building its ties to those payment service providers and has not actively developed or sold the Checkout solution since 2021, the documents show. Still, the unit is a major driver of Klarna’s profitability within Europe and commands more than 40% market share in Sweden.
“Klarna Checkout is very dear to me, and the impact it’s had on Klarna’s journey is immense,” Klarna CEO Sebastian Siemiatkowski said in a statement to Bloomberg News. “I’m so pleased it’s finding a new home.”
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For years, Klarna has sought to focus more on building its ties to those payment service providers and hasn’t actively developed or sold the Checkout solution since 2021, the documents show. Still, the unit is a major driver of Klarna’s profitability within Europe, the documents show.
“We look forward to engaging with our merchant partners and presenting our plans and road map for the continued evolution of KCO,” Hajabdolahi said in the statement.
Klarna staffers including Alexander Olsson, Jesper Eriksson, Rasmus Fahlander and Erik Gustafson will be transferred to the new standalone entity, the documents show.
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“Klarna is looking to divest the Klarna Checkout to remove the friction and completely focus on working with its distribution channels,” according to the documents. “Thus, creating a simple relationship to all partners without the PSP vs Checkout conflict.”
The deal will be financed with 336 million kronor in equity and 1.7 billion kronor in debt, according to the documents. The deal also includes a performance-based payment and a revenue share agreement with Klarna.
