Alibaba has purchased a minority stake in Swedish ‘buy now, pay later’ giant Klarna as the pair embark on a new global partnership.
Ant Financial, Alibaba’s payments arm and the world’s most valuable fintech company, has bought a minority stake in Klarna for an undisclosed sum.
While neither company would disclose the size of Alibaba’s investment, Reuters reported that it accounts for less than one per cent of the company.
Ant Financial’s wildly popular digital wallet Alipay already works with Klarna to offer its payment options on AliExpress.
This new investment will “deepen ongoing collaborations” and bring more “innovative and convenient” financial services to consumers internationally, as Alibaba continues its push to boost its Western audience.
“For too long consumers have had to endure non-intuitive, boring and overly complex services when shopping both online and offline,” Klarna’s chief executive Sebastian Siemiątkowski said.
“At the heart of this cooperation between Klarna and Alipay is a shared ambition of innovating truly superior shopping experiences and creating destinations of inspiration for consumers across the world.
“Alipay, and the wider Alibaba Group, have truly set the global pace on retail innovation and the app economy. We are delighted in this confidence shown in Klarna in defining the future of payments and shopping and are very much looking forward to working together further in the future.”
Last week Klarna posted the first ever loss in its 15-year history despite revenues jumping by almost a third.
Klarna saw its profits plummet from SEK161 million (£12.8 million) in 2018 to a loss of SEK1.1 billion (£87 million) last year.
This was despite seeing a 31 per cent rise in revenues throughout 2019 to SEK7.2 billion (£570 million) and adding 75,000 new merchants to its platform.
It attributed its first loss since it was founded in 2005 to increasing investment into its engineering hub in Berlin alongside a huge push into the US market.