Swedish ‘buy now, pay later’ (BNPL) firm Klarna has been valued at $31 billion after a $1 billion capital injection following a highly successful funding round.

The announcement comes at a time when the BNPL industry is experiencing a sharp global uptake, which has been largely attributed to the financial impacts of the COVID-19 pandemic.

In the UK alone, Worldpay has estimated that BNPL schemes will expand to 10% of all e-commerce transactions within the next four years, doubling the sector’s market share.

For Klarna, worldwide volume has increased by 46% in 2020 at $53 billion, whilst the firm also records a year-on-year increase of $1 billion, amounting to a 40% annual expansion. 

Additionally, the business has recorded 15 million customers in the US for 2021, more than doubling its total number of users in the market. The Klarna app was downloaded 60,000 times in December reaching 3.5 million active monthly users, an increase of 204% from the previous year.

“Klarna’s accelerating growth is evidence of strong consumer demand for smarter, seamless, and more flexible shopping and purchase experiences,” explained David Sykes, Head of Klarna US, regarding the company’s success in the American BNPL market.

The latest revenue generation comes six months after a $650 million funding round, leading to the company’s valuation at $10.65 billion.

However, Klarna’s meteoric ascent in the field of BNPL has not gone unnoticed, with both the EU and UK Financial Conduct Authority (FCA) accusing the company of bypassing consumer credit checks and offering customers unsecured credit lines.

Perhaps in response to these allegations, Klarna has announced its intention to pledge one percent of the capital raised in its latest funding drive to a new global sustainability initiative. 

“I believe our industry has a responsibility to help in some way solve global sustainability issues and I hope others will join Klarna in our ambition,” said Sebastian Siemiatkowski, Co-Founder and CEO of Klarna.