SoftBank is supporting the buy-now-pay-later firm Klarna in a financing spherical value over 40 billion US

Sebastian Siemiatkowski, CEO of Klarna, speaks at a technology and music conference in Stockholm, Sweden.

Johan Jeppsson | Bloomberg via Getty Images

Klarna, a European buy-now-pay-later company, is on the verge of securing a new round of funding valued at more than $ 40 billion, according to a source familiar with the matter.

The investment is backed by SoftBank and several other investors, said the person who asked to remain anonymous as the details have not yet been released.

The news, which precedes a possible blockbuster listing, was first reported by Business Insider on Thursday.

The exact size of the investment round is not known. However, it is expected to be less than the $ 1 billion Klarna raised in March when it was worth $ 31 billion, according to Business Insider.

Klarna declined to comment when contacted by CNBC.

Klarna is already listed as a portfolio company via the company’s Vision Fund 2 on the SoftBank website. Klarna is also supported by well-known investors such as Snoop Dogg and the Chinese Ant Group. A SoftBank spokesperson was not immediately available for comment.

If the deal goes through, Klarna will cement its place as Europe’s most valuable private tech unicorn, surpassing Amazon-backed delivery service Deliveroo and online payment processor Checkout, which reached $ 15 billion in January.

Less than three hours after the first report of the financing round, Klarna CEO Sebastian Siemiatkowski announced on Twitter that the company had experienced a “self-inflicted incident”.

“It is so sad and frustrating to realize that we had a self-inflicted incident for 30 minutes that compromised the privacy of some of our users,” he said, pointing out that the company may have experienced a data breach.

“Full attention from all colleagues to get things back to normal, to take measures to avoid this in the future and to communicate widely,” added Siemiatkowski.

Klarna continues to grow rapidly more than a decade after its inception and has made significant strides in expanding into the United States. The increased demand for buy-now, pay-later plans got a big boost in the past year, partly due to the coronavirus lockdown accelerating a shift towards online shopping.

At the same time, the increased demand for buy-now-pay-later products has put the UK regulators under the microscope, who will be introducing tough new rules for the sector.

“With this product we are challenging a massive industry that has overwhelmed consumers with overdraft fees and interest-bearing terms of use,” Siemiatkowski told CNBC in February. “There is a lot of misunderstanding in the UK, but when we get the chance to sit down with British politicians, they get convinced and then switch sides.”

Klarna achieved annual sales of US $ 1 billion for the first time last year and achieved a record operating profit of US $ 1.2 billion. However, losses also accelerated 50% due to increased costs associated with international expansion. Klarna’s net loss was approximately $ 109.2 million.

Klarna makes money by collecting a fee from merchants every time a customer makes a transaction. As a result, merchants who use their service often see an increase in sales. The company is a regulated bank and is increasingly pushing private customer business in its home country as well as in Germany.

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