Klarna Wins Walmart Partnership, IPO Prospects Rise

Klarna Secures Exclusive Buy Now, Pay Later Partnership with Walmart

Following its initial public offering (IPO) filing, Klarna, a leading Swedish fintech company, revealed on Monday an exclusive agreement to offer buy now, pay later (BNPL) loan services for Walmart shoppers.

Shifting BNPL Landscape

This new collaboration signifies a change in the BNPL market, as the partnership was previously held by Affirm, a key competitor. Klarna is set to become the sole provider of these financing options for Walmart customers.

Leveraging OnePay for Loan Distribution

Klarna will facilitate these loans through its fintech subsidiary, OnePay, in which it holds a controlling interest. Ribbit Capital also provides backing for OnePay. The transition to Klarna as the loan provider is scheduled to occur later in the current year, according to a company statement.

Affirm's Stock Response

News of the Walmart partnership impacted Affirm’s stock price, resulting in an 8% decrease by early Monday afternoon, with shares trading at approximately $46.

Competitive Dynamics Between Klarna and Affirm

The two companies have long been rivals within the BNPL sector. However, Affirm’s primary focus remains the United States market. Affirm went public in 2021 and recently reported a GAAP net income of $80 million.

Klarna, after experiencing a significant decline in valuation, has demonstrated a recovery, posting a net profit of $21 million in 2024. This represents a substantial improvement compared to the $244 million loss recorded in 2023.

Differing Revenue Strategies

Last September, Affirm’s CEO and co-founder, Max Levchin, expressed a desire to distinguish his company from competitors like Klarna. He highlighted a strategy of generating revenue directly from individual transactions.

Levchin stated that Klarna and others prioritize revenue from marketing initiatives. However, a Klarna spokesperson countered this claim, asserting that the majority of Klarna’s revenue originates from transactions, with marketing contributing a smaller portion.

Levchin further emphasized that Affirm does not generate revenue through advertising or marketing practices.

“While I respect other business models, ours is centered on ensuring each transaction is financially viable,” he explained.

Global Reach and U.S. Market Focus

Klarna’s operational scope is more extensive globally than Affirm’s. However, the company has significantly expanded its presence in the U.S. market. Klarna indicated to TechCrunch last April that the U.S. and Germany are its largest markets, with the U.S. frequently surpassing Germany on a quarterly basis.

Walmart Partnership Amplifies U.S. Presence

Securing Walmart as a partner is expected to substantially enhance Klarna’s position within the U.S. market. Walmart, as the world’s largest retailer by revenue, reported $441.8 billion in U.S. revenue alone last year.

Note: A statistic detailing the potential impact of Walmart’s U.S. volume on Klarna’s total GMV was removed at the company’s request following initial publication.