Sweden’s Klarna Buys Germany’s Sofort for $150 Million to Solidify Pan-European Payments Network
Klarna, the Stockholm-based online payments company, has bought Germany’s Sofort, at a price that sources peg at $150 million.
With the acquisition, Klarna becomes one of the largest independent payments services in Europe, the company said, with about 10 percent market share of the $100 billion European e-commerce market.
“The reason for the acquisition is to do two things: Accelerate the push into Germany, and also to accommodate different needs in different markets,” said Mike Moritz of Sequoia Capital, which is an investor, in an interview.
Klarna offers payment solutions — such as a one-click purchase option and pay after delivery via anti-fraud technology — for a wide range of online storefronts across Europe; it did $200 million in revenue last year. It has 15 million users and 15,000 merchants in Sweden, Norway, Denmark, Finland, Germany, the Netherlands and Austria.
The purchase of Sofort, which is the major player in Germany, gives Klarna a definitive dominance there. Sofort has 25,000 online shops in Germany, as well as in Austria, Switzerland, the Netherlands, Italy, Belgium, Poland and the U.K.
Klarna, which means “clear” in Swedish, has raised $250 million in funding from Sequoia, as well as from DST and General Atlantic.
It will operate the Klarna and Sofort products separately, and the company noted that the deal still needs approval from Sweden’s Financial Supervisory Authority. The combined company will have about 1,000 employees — 850 at Klarna and 130 at Sofort.
Klarna has yet to enter the more competitive U.S. market, though sources said it is likely to, eventually.
“There will be a variety of large payments-related companies that develop over the next 10 years and ride around the globe,” said Moritz, who is on Klarna’s board. “So it’s a fruitful place to invest, since the two big trends are towards online commerce and the amount of online commerce being done from mobile device.”