Payments and shopping service platform Klarna is entering the Canadian market with plans to establish a physical presence across the country.
The Sweden-founded company has opened a product development and tech hub in Toronto, marking its first in North America. Klarna plans to bolster the tech hub by hiring more than 500 engineers by 2025, and opening offices in Vancouver and Québec.
Klarna’s other offices are located in Stockholm, London, New York, Berlin, and more.
Klarna plans to bolster the tech hub by hiring more than 500 engineers by 2025, and opening offices in Vancouver and Québec.
Launched in 2005, Klarna’s platform allows users to pay for products across four interest-free installments, bi-weekly from the time of purchase. Its “Pay in 4” service can be used online, in-store, and through the Klarna app while checking out with Klarna’s integrated retail partners. These include Canadian brands such as Harry Rosen, Mejuri, and Frank and Oak, as well as global retailers such as adidas, Sephora, L’Oreal Canada, and GameStop.
Klarna said its platform is used by over 100 million people, processing two million transactions per day. With over 5,000 employees, the FinTech firm is active in 20 markets. In June last year, Klarna raised $693 million with a valuation of $45.6 billion.
“Consumers across the world are moving away from traditional credit models to alternatives that better meet their expectations by offering smarter and more transparent ways to purchase, and the Canadian shopper is no different,” said Sebastian Siemiatkowski, Klarna’s co-founder and CEO. He added that Klarna’s internal research found that at least half of Canadian shoppers between the ages of 25 to 56 are looking for flexible payment options at checkout.
Alongside attracting Canadian consumers, Klarna also intends to tap into the country’s network of retailers to serve as a “growth engine.” The company claims it works with around 250,000 merchant partners worldwide.
Siemiatkowski told The Globe and Mail that Klarna originally planned to launch in Canada last summer, but the regulatory approval process took longer than expected.
However, Klarna isn’t the first to introduce the buy-now, pay-later payments model to Canadians. Toronto-based PayBright (acquired by Affirm in 2020) became the first in the country in 2017 to bring instant financing solutions for e-commerce.
Afterpay, an Australian payments company, brought its services to Canada in 2020. Last year, Afterpay started to offer its services in French to target shoppers in Québec. Fellow Australian buy-now, pay-later player Zip brought its services to Canada last year, as it also expanded to Southeast Asia (Disclosure: at time of publishing Zip is currently a sponsor of BetaKit).
As part of its entry into the Canadian market, Klarna is partnering with Toronto-based Moneris Solutions Corporation, a solutions provider for mobile, online, and in-store payments.
Feature image from Pickawood via Unsplash