Klarna has arranged a new multi-year forward flow financing agreement through which it will sell newly originated, short-term receivables from its ‘Pay in 4’ buy now, pay later (BNPL) service to US student loan servicing company Nelnet Financial Services.
Klarna states in an announcement on the deal that “up to $26 billion in total payment volumes” are expected to be sold over the course of the agreement.
Funds will be used to expand Klarna’s presence in the US while “enhancing balance sheet flexibility and supporting long-term capital strategy”, the company says.
The fintech, headquartered in Stockholm, Sweden, has been live in the US for almost a decade now, first launching its BNPL service in September 2015. Back in March, the company announced it had publicly filed a Form F-1 registration statement with the Securities and Exchange Commission (SEC) as it gears up for its much-anticipated initial public offering (IPO) in the US.
Klarna has since been expanding its product suite, including inking a partnership with Californian issuer processor Marqeta in June to support the general rollout of a new debit card service, which Klarna said at the time is due to arrive “later this year”. The service is to sit alongside Klarna’s US credit card offering, which was first unveiled in April 2024.
Niclas Neglén, CFO of Klarna, describes the deal with Nelnet as “a landmark transaction for Klarna in the US”, adding that the partnership “allows us to scale a core product responsibly”. The origination and servicing of receivables involved in the programme is to remain under Klarna’s remit.
Klarna previously arranged a similar agreement with a subsidiary of funds advised by Elliott Advisors (UK) Limited last year, to which it sold substantially all its short-term, interest-free product receivables in the UK, with the move freeing up an estimated £30 billion in funds.
Source: https://www.fintechfutures.com/
