Klarna’s “buy now, pay later” venture will expand into Berlin in early 2020, with a new tech hub set to house more than 500 members of staff.
The Swedish bank will open a new 7,400 square metre site in a repurposed car garage in the centre of Berlin’s thriving technology scene in Mitte.
While Klarna’s Mitte hub will join the ranks of the firm’s other German offices in Munich and Linden, the latest addition will have a workforce five times the size of the older sites, with employees focused on product, engineering and commercial growth.
“Berlin is one of the most exciting tech and entrepreneurial hubs worldwide and attracts exceptional local and international talents from all over the world,” said Klarna chief executive Sebastian Siemiatkowski.
“We are very proud and humbled to be part of that thriving ecosystem now. This site will enable us to further scale our footprint in Germany, Austria and Switzerland and new markets, but at the same time build new products and services to solve people’s shopping pain points across Europe and the US. We are on a very exciting journey from a pure payment provider to a global shopping ecosystem and our team in Berlin will play a decisive part to reach our ambitious goals,” added Siemiatkowski.
In August 2019 Klarna raised $460 million in a funding round that valued the company at $5.5 billion, making Klarna the most valuable private fintech company in Europe.
However, concern over the rise of “buy now pay later” platforms have led to new research linking rising credit debt and financial stress to deferred payment schemes.
Hastee’s annual Workplace Wellbeing Study has found that 56 per cent of millennial workers say buy now pay later schemes, which allow customers to stagger payments of a purchase over a number of instalments, encourage them to spend money they may not be able to afford.
Across all age groups who have used the increasingly popular scheme, 27 per cent said they had experienced financial stress after doing so.
Earlier this week former pensions minister and debt campaigner Ros Altmann told The Guardian that cooling-off periods and more stringent affordability checks should be introduced before people take on new debts.
“The rise of buy now, pay later retailing is of great concern, as more people are being enticed into high-cost debt that they may struggle to repay,” Altmann told The Guardian.