Klarna, the Swedish provider of online payment services, raised $650 million in an equity funding round that values the whole company $10.65 billion. Known in Europe for the growing popularity of its buy-now, pay-later program, claims that the valuation ranks it as the highest-valued private fintech in Europe and the 4th one worldwide.

In the first half of this year, the volume of transactions on Klarna and the company’s revenues grew by 44 percent and 36 percent year-on-year to more than $22 billion and $466 million, respectively.

The funding round was led by Silver Lake, a technology investment firm, alongside GIC, Singapore’s sovereign wealth fund, as well as funds and accounts managed by BlackRock and HMI Capital. Concurrently, other investors have acquired shares from existing shareholders.

The funding will help Klarna grow and “accelerate its strong momentum across all markets,” especially in the U.S. where the company has more than nine million customers. Another big market for Klarna is the U.K., where it claimed over 8.6 million customers and over 6,500 retail partners a couple of months ago.

Klarna’s direct-to-consumer app has more than 12 million monthly active users worldwide. The app features a buy-now, pay-later shopper loyalty program called Vibe. Vibe is currently available to consumers in the U.S. and will soon be launched in other markets.

The company said that it has seen a surge in demand, adding more than 35,000 retailers during the first half to its network of more than 200,000 partners. It cited a McKinsey & Company survey stating that more than 75 percent of consumers have tried new brands, places to shop or methods of shopping during the Covid-19 pandemic and that 82 percent of those who have tried a new digital shopping method intend to continue using it. 

Notably, Klarna has made significant inroads into providing short-term instalment solutions to the footwear industry, working with brands and companies such as Adidas, Timberland and Clarks.

Meanwhile, PayPal, the big U.S.-based online payment provider, announced that it will launch “Pay in 4,” a short-term installment payment scheme for customers in the U.S., early in the fourth quarter. The service will permit merchants to be paid upfront while customers can pay for purchases between $30 and $600 over a six-week period in four installments.

Pay in 4 will be included in the existing PayPal pricing, so merchants do not pay any additional fees to use the service. Consumers will not pay fees or interest either and payments will be seamless, with automatic re-payments. However, a fee may be applied if a payment is not received on time. Pay in 4 will appear on customers’ PayPal wallets, so they can manage their payments through the app, the company explained.

“In today’s challenging retail and economic environment, merchants are looking for trusted ways to help drive average order values and conversion, without taking on additional costs. At the same time, consumers are looking for more flexible and responsible ways to pay, especially online,” said Doug Bland, senior vice president in charge of global credit at PayPal.