Klarna Partners with Stripe Ahead of IPO

Klarna has entered a significant distribution partnership with Stripe to expand its reach and add more merchants ahead of its planned IPO in the U.S., aiming for a potential valuation of up to $20 billion. This collaboration allows Klarna’s buy now, pay later (BNPL) service to be available to merchants using Stripe's payment tools across 26 countries, following a previous partnership during the pandemic in 2021. Since integrating with Stripe in October, Klarna has reportedly doubled its number of new merchants, adding 100,000 in just three months. The partnership is also expected to boost revenue for Stripe, as businesses offering BNPL have seen an increase in conversion rates and larger order values. Klarna generates revenue from transaction fees charged to retailers, while Stripe will earn a share of these fees in exchange for promoting Klarna as a payment option. The deal reflects Klarna's strategy to regain profitability and enhance its market position as it heads toward its IPO.