STOCKHOLM Dec 18 Swedish online payments firm
Klarna is buying German peer SOFORT, giving it a 10 percent
share of the e-commerce payments market in the 14 European
countries in which the two firms operate and building up its
challenge to larger rival PayPal.
Klarna's services have been hugely popular in the Nordic
region. It allows consumers to buy goods online but pay for them
after delivery, taking a cut from merchants and charging
interest on instalment payments.
Klarna said on Wednesday it was buying SOFORT, which focuses
on online direct banking and is a leading player in Germany and
Austria, from majority shareholder Reimann Investors for an
Combined, the two will have 25 million users and cover more
than 50 percent of all German online merchants.
A Klarna spokesman said revenues for the combined company
would be 200 million euros ($275 million) this year and would
grow "considerably" in 2014.
The deal, which news site TechCrunch quoted sources as
saying was worth $150 million, means the company will be present
in 14 European markets where consumers are expected to make
transactions online this year worth $100 billion, Klarna said.
The company has also said it is keen to tackle new markets
in Britain and North America, where payment pioneer PayPal
So far, no company has managed to take significant market
share from PayPal, which was bought by EBay in 2002 for
$1.5 billion and is now its crown jewel, making up well over a
third of total revenue.
Klarna, which had a near $1 billion valuation based on its
latest financing round, was founded in 2005 and turned
profitable in only its second year of business.
It is backed by the likes of General Atlantic and Russian
investor DST, one of Facebook's biggest shareholders.
Michael Moritz, a partner at Sequoia Capital whose investments
have included PayPal and Google, is on its board of
The deal for SOFORT is subject to approval by Sweden's