As buy-now-pay-later fintech startup Klarna nears its U.S. initial public offering, it is revealing a new partnership establishing it as Walmart’s exclusive U.S. installment loan partner.
Klarna announced on Monday that it would work with consumer finance app One Pay to offer U.S. Walmart customers the option to buy now and pay in installments later for thousands of products, including electronics and home items.
“This is a game changer,” Sebastian Siemiatkowski, co-founder and CEO of Klarna, stated in a press release. “One Pay choosing Klarna as their exclusive installment loans partner at Walmart in the U.S. is a huge vote of confidence as we pursue our goal of being available everywhere for everything.”
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One Pay, a digital wallet that links to shoppers’ credit and debit cards and allows them to make contactless payments, is already an option for checkout at Walmart’s physical stores and website. Starting later this year, it will offer installment loans powered by Klarna as an option for checkout, and give customers the flexibility to choose a repayment plan ranging from three to 36 months.
Klarna’s Walmart partnership blocks one of its main rivals, Affirm, from continuing to provide buy-now-pay-later services to Walmart customers. Affirm first announced a partnership with Walmart in 2019.
The global buy now, pay later market is expected to reach $122.26 billion in value in 2025.
The move positions Klarna to tap into Walmart’s millions of weekly customers at more than 4,605 U.S. stores. Klarna makes the majority of its income by charging merchants or store partners fees ranging from about 3% to 6% of the total purchase amount. It also makes money from consumers in the form of interest charges and late payment fees.
Klarna CEO Sebasitan Siemiatkowski. Photo by David M. Benett/Dave Benett/Getty Images for Klarna
Related: There Are New Rules for ‘Buy Now, Pay Later’ Programs — Here’s What to Know
What Is Going on With Klarna’s IPO?
Klarna filed an initial public offering prospectus on Friday showing that it plans to go public on the New York Stock Exchange under the ticker symbol KLAR. The company did not reveal when it was planning to go public, the number of shares to be offered, or the expected price range.
The prospectus showed that as of December 31, 2024, Klarna had 93 million active users, brought in $2.8 billion in revenue, and boasted partners like Etsy, Airbnb, and Macy’s, all of which offer Klarna as an option for checkout.
Klarna was founded in 2005 and reached its valuation peak in 2021 at $46 billion. By 2022, its valuation had dropped by 85% to $6.7 billion due to a dampened investor outlook on the buy now, pay later space. Klarna failed to produce a profit for 2022 and 2023, reporting a net loss of $1.65 billion and $244 million respectively. According to CNBC, Klarna’s valuation is now in the $15 billion range after the company became profitable again in 2024, with a $21 million net profit on $2.8 billion in revenue.
Klarna’s employee count has dwindled in recent years from 5,000 employees in 2023 to 3,800 in 2024 as the company implemented a hiring freeze. Siemiatkowski told The Financial Times in September 2024 that he plans to keep the freeze in place and not hire replacements for people who leave the company.
