China’s Ant Financial buys small stake in Swedish unicorn Klarna
Ant Financial, the Alibaba affiliate company which operates China’s digital wallet Alipay, has bought a small stake in Swedish fintech unicorn Klarna, Reuters reports.
The buy now, pay later firm is already embedded into AliExpress, the international shopping platform run by China’s ecommerce giant Alibaba.
But at the end of last month, the $5.5 billion-valued Swedish firm – Europe’s joint biggest fintech along with Revolut – announced its first ever annual net loss of $92.8 million.
Despite this, Ant Financial has proceeded in its plans to buy a small stake in the firm. According to a Reuters‘ source, the Chinese firm now holds a less than 1% stake in Klarna – a “slight uptick” to the $460 million funding round last August which valued Klarna at $5.5 billion.
The new stake will see the Swedish fintech expand into new global markets, says its CEO Sebastian Siemiatkowski, who also hints to new products set to be developed by the two companies.
But Siemiatkowski affirms that one of these new global markets will not be China. “The US is often used as a benchmark of what it means to be competitive but in my world it just does not compare to the Chinese one,” he says.
“The level of innovation there is just tremendous, especially in app retail and payments – they are the global pace setters. For Klarna, there is much more opportunity in other markets.”
The move of Big Techs into the European fintech and payments space is happening slowly and behind the scenes. Instead of giant strides, the likes of Ant Financial and Tencent are biding their time, spreading their investments across the continent in small doses.
These include Tencent’s investments in Paris-based challenger bank Qonto and French mobile payments start-up Lydia, as well as Alipay’s deal with UK-based remittance firm WorldRemit to allow users to send cross-border payments using the Chinese digital wallet.
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