Klarna just announced another acquisition as it continues to expand beyond its core Buy Now-Pay Later (BNPL) platform. Its latest buy is for U.K. social shopping firm Hero. Other recent acquisitions include Nuji and Toplooks.ai in the past year. This reinforces its strategy to add e-commerce and AI resources that enhance customer engagement for retailers.
These areas are synergistic with BNPL shopping activity that continues to surge in the U.S. market. Klarna’s valuation has been rapidly rising, now pegged at $31 billion, which means there is more room in its shopping cart.
The following excerpt from a Wall St. Journal article reports more on the topic:
Klarna Bank AB, one of Europe’s most valuable financial startups, said it struck a deal to buy e-commerce technology firm Hero Towers Ltd., a move that will expand its foothold in online shopping.
London-based Hero connects online shoppers with retail workers via text messages, videos, and online chat rooms. It helps retailers who sell major brands, such as Nike and Adidas, to compete with Amazon.com Inc. by offering better customer service, according to Hero’s founder, Adam Levene.
Klarna specializes in buy-now-pay-later services, an increasingly popular type of cash advance that lets merchants offer a way for customers to pay for goods and services in installments without paying interest. Klarna makes money by charging the merchants a fee. It competes with traditional credit-card companies.
David Sandstrom, Klarna’s chief marketing officer, said in an interview that the company is buying Hero to expand its services across the whole purchase process, from when customers start browsing to when they pay. “I foresee buy-now-pay-later becoming more of an infrastructure play going forward and Klarna as a whole becoming much more of a shopping service,” Mr. Sandstrom said. “We are seeing ourselves much more as a retail tech platform.”
Overview by Raymond Pucci, Director, Merchant Services at Mercator Advisory Group
