In a deal reported to be worth $150 million, mobile payments company Klarna is acquiring German rival, Sofort.
The purchase will make Klarna one of the bigger fish in Europe’s payment industry pond. The company estimates that the acquisition will result in a 10% share of an e-commerce market valued at $100 billion.
A few more metrics
on the new Klarna:
- Operates in 14 countries
- Serves 43,000 merchants and 25 million users
- Earns $200 million in revenues annually
- Expects to process $10 billion in transaction value in 2014
The new Klarna will combine the company’s current strength in northern Europe with Sofort’s market reach in Germany and Austria. Both companies will be operated separately, and the acquisition will require approval from Sweden’s Financial Supervisory Authority.
Klarna has been a favorite of major industry investors, racking up $250 million in funding from the likes of Sequoia Capital. Sequoia was credited
for originally suggesting the partnership with Sofort.
A leading mobile payments company in Europe, Klarna’s Checkout solution lets consumers make online purchases and pay after delivery. This approach, according to Klarna, helps merchants increase conversion rates and limit cart abandonment. At the same time, consumers appreciate the frictionless process and flexibility that allows them to pay later by email in full or in installments.
As founder and CEO Sebastian Siemiatkowski said during his FinovateSpring appearance
in 2012: “We think of ourselves as a new rail, a new infrastructure for payments. One that is safer and simpler for consumers, but at the same time safer for merchants because (having) sub 1% losses allows us to take all the default and fraud risk for merchants.”
For European consumers and merchants (Klarna has yet to make its mark in the U.S.), today’s news is another big step in this direction.